Treasury yields rose Tuesday and stock gains were limited. The 10-year was yielding 2.644 percent, and the five-year note yield moved more dramatically to a high yield of 1.75 percent from an earlier level of 1.68 percent. The three-year rose out of its recent range, to 0.989 percent, a three-year high.
"The three-year Treasury notes are having a new high yield. They think the Fed is moving closer to tightening. If this meeting is status quo, yields are going to fall hard," said Chris Rupkey, chief financial economist at Bank of Tokyo Mitsubishi.
Rupkey said the economy is better than the Fed believes, and he hopes to see the central bankers move forward their views on when interest rates would be hiked.
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"I would think this could be a meeting where possibly the Fed chair gets some push back from the other members around the table. This will be one meeting where we see how effective she is in garnering votes and collecting the points," he said. "There's a lot of outlier opinions there. We'll see how all those opinions come together and make policy."
New members have joined the committee, including Stanley Fischer as governor, replacing Jeremy Stein, and Loretta Mester replacing Sandra Pianalto as president of the Cleveland Fed.
"If we don't get some big news tomorrow, the bond market is going to take the summer off," Rupkey said. "It's building for a crescendo here."
Read MoreWith economy hazy, Fed is unlikely to shift course
The Fed will also focus on the problems the economy faces.
"They have to deal with [the] housing market as one risk, plus the geopolitical risks and higher prices at the pump as a result of the geopolitical risks," said Swonk. Gasoline prices averaged $3.66 per gallon, up from the national average of $3.64 a week ago, and analysts see pump prices rising further based on the jump in oil prices on Iraq concerns.
Housing starts for May fell 6.5 percent by 1 million units, adding to concerns that the housing recovery has stalled.
—By CNBC's Patti Domm