Bonds Signal Rate Hike Imminent for Fed

Morgan Stanley's Matt Hornbach, global head of macro strategy, expects the Federal Reserve to raise interest rates by 25 basis points on Wednesday.

This move would be in line with market expectations, which are pricing in a hike at this time. However, Hornbach suggests it's possible that this could be the Fed's last rate increase, but that's not what investors are currently anticipating.

Bond markets are sending clear signals to the Federal Reserve about their need to hike rates, according to Hornbach. He implies that if the Fed doesn't act, they may miss an opportunity to normalize interest rates and potentially exacerbate inflationary pressures.