The curve doesn’t have far to go to achieve technical objectives, and I can’t see the need to push 2s too much further into the September 26 meeting.
I had thought we could get some corrective steepening, but I am losing that idea given the behavior of 10-year Treasurys near the 3 percent mark. That said, I do see the potential for 2s to fulfill the objective and touch 2.80 percent.
With so much data out of the way and Fedspeak pretty clear, I simply don’t see any need to nuance the meeting further. Additionally, with odds of a December hike better than 75 percent, the one thing that might skew that, the Federal Open Market Committee statement, has to wait.
I don’t have much of a take on stocks, other than to reiterate they are too rich for me, but being right and early is pretty much the same as being wrong. That said, there is a possible rising wedge in place that targets the S&P 500 to around 2845. I’ll keep an eye on it.
David Ader is Chief Macro Strategist for Informa Financial Intelligence.