Calm before the event: futures are grinding green into an FOMC decision the market has already priced at roughly 92-93%, so the real risk is the dot plot and Warsh's tone, not the hike itself.
Tuesday's tape set the stage — the S&P and Nasdaq both closed lower with the 10-year yield punching up near 5%, the highest since 2007, as oil stayed sticky in the $104-108 Brent/WTI zone on Hormuz and Saudi pipeline disruption headlines. Retail sales at 8:30 (consensus +0.9% headline) is a preview; the decision and Summary of Economic Projections land at 2pm, with the press conference at 2:30 doing the real work on rate-path pricing.
With live GEX down, treat dealer positioning as indicative: after a slide off recent highs, gamma looks thin and two-sided into round numbers on both indices, which is consistent with the whippy, low-conviction premarket drift. Vol is elevated versus summer lows given the yield spike and war overhang, and event vol should compress fast once the statement drops — the move is more likely 2:00-3:00pm than at the open.
The risk: a hawkish dot plot or a Warsh press conference that leans into "higher for longer" alongside energy-driven inflation optics flips this from a relief rally into a yield-led selloff, especially if Brent breaks back above $108 on fresh Strait of Hormuz escalation.