The Fed is remaining vigilant against inflation, which helps 10-year notes and 30-year bonds. But two-year notes still have to deal with the likelihood of higher interest rates this year.

Jeff Palma

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If they were to cut rates, it might endorse the view that the Fed believes inflation is not a problem. And that can be a dangerous game.

A 25 basis-point (one-quarter percentage point) move is very likely and is the most likely outcome.

The data gives investors hope the Fed won't have to stay aggressive too long.

A little sell-off today should not be surprising in front of such an important report.

There's a lot of focus in the bond market on oil. It's been such a hot story because of people's fears of higher inflation.