Fed is all set to hike the interest rates by 25 basis points this Wednesday and the bond markets seem to have priced-in the move. 

The 2-year yield, which mimics short-term rate hike bets, rose to 1.388%; the highest level since 2008. The yield currently trades around the 1.376 % level, which is well above the December high of 1.304%. 

Meanwhile, the 10-year treasury yield closed yesterday at the highest level in two years, however, it still trades just below the December high of 2.64%. Moreover, the yields at the long end of the curve are exposed to a rise in the safe haven demand. Thus, the fact that it still trades below the December high does not mean it has not priced-in a 25 basis point rate hike.