Bond markets have continued taking measured steps back from the strongest levels in nearly 3 weeks seen on Monday.  So far, today's selling pressure has been roughly in line with yesterday's.  This time, it's more about traders adjusting positions ahead of the Fed.  While that was also a factor yesterday, it was trumped by a much bigger slate of corporate debt issuance (companies rushed to issue their debt early in the week before Fed-induced volatility).

Economic data was a non-event this morning.  Pending Home Sales were weaker than expected and bond markets did nothing with that info.  In fact, there's only been another modest move higher in yields since 10am and it wasn't at all correlated with the Pending Sales data.  If anything, the most recent selling in bond began as equities markets improved following the 930am NYSE open.

Whatever reaction we might have seen to the 1pm 5yr Treasury auction will likely be muted by the impending release of the Fed Announcement at 2pm.  This assumes that bonds aren't already on the move leading up to the announcement.  That can happen, and if it happens in a negative way, lenders won't hesitate to reprice.  Conversely, positive reprice potential is always quite low ahead of the Fed, even if gains would otherwise justify it.