The capital markets are bracing themselves ahead of a Federal Open Market Committee meeting on Tuesday and a subsequent monetary policy announcement on Wednesday, which should give indications on the current state of the economy.
Meanwhile, benchmark Treasury yields gained–the 10-year rose to 2.973% as of 2:45 p.m. ET and the 30-year yield ticked up to 3.102%. The 10-year Treasury hit as high as 2.99%, reaching its highest level in over a month.
The meeting comes before the Department of Commerce stated last week that gross domestic product grew by 4.1% in the month of June–its fastest since the third quarter of 2014 and the third-best growth rate dating all the way back to the Great Recession. Furthermore, the Department of Commerce revised its first-quarter numbers to show a 2.2 percent increase rather than 2 percent.
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The increase in GDP was spurned by a mix of tax cuts, deregulation and spending increases. The Fed expects GDP to rise 2.8 percent for 2018 in the aggregate, but diminish to 2.4 percent in 2019 followed by 2 percent in 2020.
The prevailing sentiment is that Fed Chair Jerome Powell and the FOMC are set to raise interest rates two more times through 2018.