Business

With Treasury volatility spiking in "panic" mode but equity volatility in "everything will be fine" mode, there is plenty of room for the algos to go wild around this afternoon's decision. As Nanex shows, the last few years has seen lower and lower liquidity on Fed days as the pattern of liquidity collapse intraday provides just the ammunition for the instant buying-panic in the first 2 minutes after the decision.

Equity traders seem extremely complacent...

At 2 p.m. EST, the only thing the financial world will care about and discuss will be the Fed's [first rate hike in 9 years|epic disappointment]. So for those who still haven't made up their mind about what the Fed's [dovish|non-dovish] rate hike means, here is all you need to know.

First, a list of all the key announcements and public statements that everyone will be parsing at a feverish pace, courtesy of Citi:

The schedule

Submitted by Charles Hugh-Smith of OfTwoMinds blog,

The upside is ephemeral, illusory or wishful thinking; the downside is real and lasting.

On October 30, the BOJ was widely expected to do something and disappointed markets by doing nothing.

Then, on December 3, the ECB had pushed markets into a rabid, EURUSD-shorting frenzy only to dramatically disappoint by doing the barest of minimums compared to the historic pre-jawboning by Draghi and company.

Today, according to the market there is nearly a ~80% probability that the Fed will announce the first rate hike, precisely 7 years to the day after it cut rates to zero.

But... "priced in"? "Non-Event"?

2Y yields are within a smidge of 1.00% for the first time since May 2010...

As The Dow dumps off opening highs into the red for the day...

But what do Treasuries know that stocks don't...

Charts: Bloomberg