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Take Your Position: Fed Meeting

Traders are preparing for the next major market catalyst and it's only days away. We're talking about the Federal Reserve policy meeting.

Investors are desperate for any hints about interest rates – and whether the central bank plans to keep rates low or potentially raise them later this year.

Treasury yields, which are closely tied to interest rates on mortgages, have been rising for several weeks. That move is largely due to worries that the huge surplus of government debt hitting the market could trigger inflation.

"One of the things we'll learn in the upcoming meeting is how concerned are they about the rising Treasury yields," explains Christopher Garman, president of Garman Research.

Some traders have been betting the Federal Reserve will have to raise interest rates by the end of the year to fight inflation. But data released Wednesday suggested that inflation remains largely in check, which could buy the Fed more time.

The Fast Money traders are hopeful that the Fed will remove at least some uncertainty about rates which they feel is dragging down investor sentiment. "When rhetoric entered the market, stocks stalled," says Joe Terranova. "If they telegraph their intentions stocks should move."

How should you be positioned?

I don’t think inflation is the bugaboo some traders make it out to be, says Guy Adami. If the Fed talks about inflation not being a problem watch out if you’re long gold or any crowded trade. They could unravel very quickly.

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Trader disclosure: On June 19th, 2009, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Seymour Owns (AAPL), (BAC), (F), (NOK); Terranova Owns (SDS), (TER), (XBI), (BTU), (ABT), (MSFT), (HES), (BTU); Terranova Is Short (XOM) Call Spreads; Terranova Is Short (OIH) And (OIH) Puts; Terranova Is Short (RIG) And (RIG) Puts; Terranova Is Short (FCX) And Is Short (FCX) Puts; Terranova Is Short (GENZ) Call Spreads; Terranova Owns (GENZ) And Is Short (GENZ) Calls; Terranova Owns (X) And Is Short (X) Calls; Terranova Owns (MS) And Is Short (MS) Calls; Terranova Owns (DIS) Call Spreads; Terranova Owns (BRCM) And Is Short (BRCM) Calls; Terranova Is Short (IBM) Calls; Terranova Owns (RIMM) And Is Short (RIMM) Calls;

Terranova Works For (VRTS); Terranova Is Chief Alternatives Strategist Of Virtus Investment Partners, Ltd.; Terranova Is Co-Portfolio Manager Of The Virtus Diversifier PHOLIO; Virtus Diversifier PHOLIO Owns (IGE), (DBC), (DBV); Virtus Investment Partners Owns More Than 1% Of (ABD), (CAL), (CLB), (DLR), (EPR), (EXR), (IGE), (MEE), (DBC), (DBV), (DBA), (SKT), (UA), (WBMD); Virtus Investment Partners Owns More Than 1% Of St Mary Land & Exploration Co,;Virtus Investment Partners Owns More Than 1% Of Seagate Tax Refund Rights

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