As traders waited for the Federal Reserve's widely expected step toward policy tightening, global equity markets fluctuated between gains and losses, and bond yield curves flattened.

After underlying gauges surged to new highs on Tuesday, futures for the S&P 500 and the Dow Jones Industrial Average both fell 0.1%. The yield on two-year treasuries remained unchanged, while the 30-year rate fell 2 BPS. The dollar lost less than 0.1% while European markets battled to find direction.

Traders are in for a widely anticipated yet game-changing moment, as the Federal Reserve may begin reducing stimulus as the first step toward raising interest rates. With bond and currency markets pricing in faster-than-expected rate rises, policymakers like ECB's Vasle and de Cos have been pressed to reconsider their judgement of inflation being temporary.

- ECB's de Cos, on underlying inflation factors: This might lead to quite high inflation rates in the following months.

- ECB's President Lagarde: The European Central Bank will unveil post-crisis bond-buying parameters in December.

- ECB's President Lagarde believes that the conditions for a rate hike are unlikely to be met next year.

- ECB's Vasle: Rising potential that inflation will remain high.

- Traders now expect an ECB rate hike of 10 basis points in December 2022 vs October 2022.

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