JPMorgan believes investors should brace for volatility.
Anastasia Amoroso, global market strategist for JPMorgan Private Bank, sees it particularly affecting the bond market.
"I would consider positioning for a pickup in volatility in the fixed income markets or maybe even a pickup in rates. If we start to price in any progress on the tax-reform front, then we may have to price in an incrementally more hawkish Fed," Amoroso said Tuesday on CNBC's "Futures Now." "Volatility in the fixed income markets has been very benign headed into this [Fed] meeting."
Volatility has been trading at historic lows. The sank to its lowest level ever on July 26. It has now traded under 10 on 56 occasions, including 38 this year.
"The market is focused on tax reform, but the market is not currently pricing in tax reform. We see that in rates," she said.
And, if rates go up, bonds generally sell-off.
Amoroso doubts the Fed will raise rates a third time this year when it meets next week. She speculates the Fed is taking a wait-and-see approach when it comes to whether the White House can successfully get a tax package through Congress.
"The window for tax reform is pretty limited because it's really between now and the end of December," Amoroso said. "As we get further into next year we start thinking about midterms," she added, referring the the 2018 elections. "You have to deliver sooner rather than later."