Bonds: Fed funds futures jump as FOMC keeps door open to December hike
These were the movements in some of the most widely-followed 10-year bond yields:
US: 2.27% (+3bp)
UK: 1.34% (+1bp)
Germany: 0.44% (-1bp)
France: 0.73% (+0bp)
Spain: 1.58% (+3bp)
Italy: 2.07% (+2bp)
Portugal: 2.38% (-4bp)
Japan: 0.03% (-1bp)
Greece: 5.57% (+3bp)
The Federal Reserve called an end to the expansion of its so-called quantitative easing programme on Wednesday, even as rate-setters on the Potomac admitted they were still analysing the reasons for the undershoot on inflation in 2017 - although Yellen indicated she did not expect it to persist.
As expected, the US central bank said it would begin limiting the reinvestment of principal payments on its holdings of government and agency debt by $10bn, starting in October, while the target range for the Fed funds rate was kept at between 1.0% and 1.25%.
Likewise, according to the Summary of Economic Projections the median forecast of the members of the Federal Reserve board and the presidents of the regional Fed banks was unchanged from their meeting in June, at 1.4%.
Hence, for the moment at least the widely-tracked 'dot plot' projections indicated that another hike in 2017 was still a possibility - albeit not a foregone conclusion.
That saw the yield on the benchmark 10-year US Treasury note advance three basis points to 2.27% and that on two-year debt rise four basis points to 1.44%.
Linked to the latter in particular, according to the CME's Fed Watch tool as of 2107 BST Fed funds futures were pointing to 71.9% odds of a 25 basis point rate hike in the central bank's main policy rate on 13 December.
Nevertheless, markets had other factors to contend with when trying to anticipate the monetary authority's decision come December, as vice-president Stanley Fischer - who was on the more hawkish side of the policy debate - was set to leave beforehand, as Philip Marey at Rabobank pointed out.
Looking further out, all the way to 2020, the SEP appeared to show policymakers still expected roughly three hikes in 2018 followed by another two in 2019.
Yet on that time horizon there was again also a large divergence between market pricing and the Fed's so-called 'dot plot'.
Muddying the waters still further, as Marey pointed out, "the projections made by the current FOMC for 2018 and beyond may be less relevant than usual. Vice Chairman Fischer will retire next month, while Chair Yellen’s term ends by the end of January next year. This means that 4 of 7 seats in the Board of Governors – including the two most important members of the FOMC – will be appointed by the Trump administration, which could have an impact on the course that the Fed will take in the coming years."