US Treasury yields rose on Wednesday, reversing the downward trend seen in recent sessions as markets braced for the Federal Reserve's interest rate decision.
The move underscores growing anxiety among traders who are pricing in a meaningful probability of a rate increase, even as the broader consensus among economists expects the central bank to keep policy steady.
The repricing reflects a deepening divergence between market expectations and professional forecasts.
While most analysts anticipate the Fed will hold rates unchanged, financial markets have assigned a non-trivial probability to a hike, creating a volatile backdrop for bond traders.
This disconnect has forced some investors to hedge against a surprise tightening, driving yields higher despite the lack of fresh inflation data.
US stock markets have traded in a narrow range in recent days, with investors adopting a cautious stance ahead of the Wednesday decision.