In the 11 years to 2021, Treasuries were in the midst of a long bull market (with 10-year yields falling all the way down), and almost 90% of the decline in yields occurred around the time of the Fed's decision. Sebastian Hillenbrand, an economist who now teaches at Harvard Business School, found a similar pattern in research dating back to 1989.

Few have fully explained why Treasury yields tend to fall around the Fed's rate-setting day.

But for some investors, it seems to prove the existence of the "Fed put option." Or to put it another way, traders have long tended to hear dovish messages from the Fed, expecting the central bank to cut rates every time the market or economy gets into trouble.

As for why this has happened even as rates have risen over the past two years, it may reflect the fact that traders are so good at predicting how the Fed will respond to economic data that rates tend to be priced in ahead of time. In the end, when policy makers tighten in line with market expectations, Treasuries can rally on relief.

Hillenbrand wrote a doctoral thesis on the phenomenon. What may have happened recently, he said, was a burst of confidence that the Fed's benchmark interest rate would eventually fall as the post-pandemic surge in inflation faded.

He also noted that the Federal Reserve's decision to keep its neutral interest rate - the level at which it would have no effect on economic growth - at 2.5 percent had bolstered that confidence. That neutral rate is less than half of the Fed's current benchmark range of 5.25% to 5.5%.

Tonight's Fed decision does not rule out the possibility of breaking a long-standing rule, as traders will be disappointed if Fed Chairman Jerome Powell knocks the market's aggressive rate cut expectations. For now, some market traders still expect the Fed to start cutting rates as early as March and believe the central bank will continue to cut rates through the year at a faster pace than predicted by the dot plot.

Overnight, on the first day of the three-day window, the US bond market was once pressured in the short term due to hot employment data. By the end of the New York session, the yield on the 2-year Treasury note was up 2.1 basis points at 4.347 percent, while the 10-year yield was down 4.4 basis points at 4.037 percent.

Traders in the interest rate market on Tuesday further reduced their bets on a Fed rate cut this year, with the odds of a move in March now down to about one in three, after a job openings report highlighted the strength of the labor market. Priya Misra, portfolio manager at JP Morgan Investment Management, said the data took pressure off the Fed to start the process of slowing the pace of balance sheet reduction and normalizing interest rates. The Fed will continue to buy time and may not commit to any easing measures for now.