Investors' focus should be set not on interest rates but on forecasts for the U.S. economy when the Federal Reserve meets Wednesday, Credit Suisse's head of financial market analysis told CNBC, suggesting that markets may need to brace for further rate hikes ahead.
The central bank is widely anticipated to hold interest rates at 1 percent when it releases its policy decision at 2 p.m. EDT (1800 GMT) Wednesday.
However, Fed chair Janet Yellen's comments could point to an "opportunistic approach" to tightening, according to Joe Prendergast, who said he expects further interest rate hikes than the two largely priced in by markets.
"The big focus from a financial market point of view will be on the statement that the Fed makes and particularly how they view the softness in Q1 in the real sectors of the economy," Prendergast told CNBC Wednesday.
"If they really emphasize this is temporary I think we will see a little bit of tightening expectation come back further into the market.
"They'll probably still tighten through this year a little bit more than the market is currently discounting," Prendergast added.
This could place upward pressure on bond yields, he suggested, though it is unlikely to impact equity markets, which are likely to be more focused on growth as well as President Trump's fiscal plan.
Other commentators, however, are expecting Wednesday's meeting to be a more subdued affair.
UBS said in a note released Wednesday that it expects the Fed to maintain its gradual stance, corresponding with the consensus of a Reuters poll of economists, while RBC Global Asset Management's chief economist, Eric Lascelles, said he anticipates a "softer statement" from Yellen.
"This week's announcement should be fairly sleepy, lacking in pomp with no press conference, no updated dot plots, or new growth forecast. Our bias is for a slightly softer statement given the recent run of macro data that saw lower inflation, a lower ISM, weak Q1 GDP growth and soft March payrolls," Lascelles said in a research note.
"The urgency to tighten has diminished, though June is still a decent bet with a 70 percent market-assigned probability."
A widely touted June hike would be the second to come this year, following an increase in March. A third is largely expected by December.
The Fed has hiked rates three times in the last 10 years. The first rate hike was in December 2015, followed by one in December 2016 and finally one in March 2017, each by 25 basis points. But investors are optimistic after the Fed surprised markets in December last year forecasting three interest rate hikes in 2017.