A Fed rate hike looks nearly certain tomorrow, which is bad news for borrowers but could calm bond markets if the message is right.

• Markets put the odds of a hike at over 90%, with more hikes priced in over the next year.
• The case for hiking: jobs data has stabilized and is strengthening again, while price pressures keep building.
• The oil shock that started in March is now feeding into everyday prices — trash pickup, phone bills — because companies pass higher fuel costs on to customers.
• The Richmond Fed just argued central banks should act decisively on oil shocks rather than look through them, a strong hint at what's coming.
• New Fed Chair Kevin Warsh is under pressure to prove he is independent of Trump, and the White House has said it will back whatever the Fed decides.

Outlook: If the Fed does not hike, the 10-year Treasury yield could spike toward 5.15%, and what Warsh says about whether this catches the Fed up matters more than the hike itself.