The bond market had a decent enough day yesterday as it managed to hold steady-to-slightly-stronger versus Monday's ugly closing levels.  "Supply" (aka new debt issuance) concerns weighed on bonds as did another run to all-time highs in the S&P.  Beyond that, there's been a certain level of apprehension ahead of today's FOMC announcement and press conference.

The Fed-based apprehension has nothing to do with the Fed's rate cut decision.  As far as markets are concerned, the rate cut is a done deal.  We can easily see that in the following chart of stocks, bonds, and Fed Funds Futures for November (the one you'd look  at to get an idea of how today's meeting would go).  But we can also see clues about the bond market's psychology and its read of what matters to the Fed. 

Simply put, the Fed is seen as being intensely focused on economic data with the two biggest shifts in Fed Funds Futures following big misses in ISM reports.  It's also notable that futures responded as we'd expect to the weaker Retail Sales data, even as 10yr yields ultimately moved higher due to Brexit.  The implication is that markets are seeing the Fed's short-term fate as sealed, but may have other ideas about the longer-term.

Fortunately, we don't have to guess about such things based solely on November's Fed Funds Futures.  If we bring January 2020 futures into the mix, we can see exactly what's happening.  Simply put, even as today's rate cut has become more and more certain, the next rate cut has become LESS likely.  The takeaway is that the market is increasingly betting on one final rate cut for this cutting cycle.  They expect the Fed to communicate that or at least allude to it, and that's one of the key reasons for the bearish anticipation leading up to today's announcement.