The Federal Reserve is expected to hold rates steady tomorrow, with no changes reflected in futures markets. Treasury ETFs like TLT and IEF are seeing increased short interest, indicating investor caution despite stable prices. Fixed-income markets anticipate multiple rate cuts in 2025, with financial and tech sector volatility dominating market attention this week.

CME's Fedwatch tool shows a greater than 99% probability that rates will remain unchanged tomorrow.

There is a chance the Fed may hint at policy shifts, but any such comments likely won't be reflected in futures.

Commentators expect the FOMC to pause rate hikes, anticipating inflationary effects from the Trump administration’s tariffs, immigration policies, and tax cuts.

The current forecast suggests an even chance of a rate cut on March 19, with fixed-income markets expecting two to three cuts in 2025.

The yield curve is finally upward sloping and unchanged over the past month, with Fixed income ETFs prices remaining stable MoM.

TLT’s short interest has risen as investors position for a potential reversal ahead of the FOMC meeting, although the stock price is stable month over month.

IEF's short interest is also up, as is its implied volatility, signaling concern about downside risk—this contradicts the Fedwatch tool's outlook. The stock is unchanged month over month,

SPY's short interest remains flat, but XLF's is up, reflecting financials' sensitivity to the yield curve.

In the coming days, volatility in the tech sector will overshadow any Fed-related movements.

The FOMC’s anticipated decision to maintain current rates aligns with market expectations but rising short interest in Treasury ETFs and growing sector-specific volatility reveal cautious sentiment. As fixed-income markets prepare for future cuts, investors remain attentive to financial and tech-sector movements, which are likely to shape the market's immediate outlook.

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