The ten-year U.S. Treasury yield touched 4.209% today, the highest level since early September.

Tomorrow, the Federal Reserve will hold a meeting, and the dot plot will be released as well. The market has basically reached a consensus—cutting rates by 25 basis points should be expected. But the issue isn’t there.

What truly makes traders uneasy is how «cautious» the Fed’s future stance will be.

TD Securities’ assessment is quite critical: the Federal Reserve is likely to signal that whether to cut rates later depends on the data. In other words, don’t expect them to make big promises, such as «continue easing all the way down,» as such commitments are unlikely to happen.

Additionally, they mentioned that even if the yields on U.S. Treasuries continue to rise after the decision, there’s limited room for growth, and a slight pullback could occur soon.

What does this mean? The market’s desired «clear and sustained easing signal» won’t be delivered this time. Yields will move, but not out of control. Risk assets may experience a volatility window after the decision, but the duration might not be long.

In simple terms, what’s making everyone nervous now isn’t how much rates have risen, but the gap between expectations and reality.