The Federal Reserve needs a little longer to decide when to raise interest rates for the first time in nine years. The bond market is more interested in when the second increase will be.

Wednesday's Fed statement noted continued improvement in labor markets while failing to provide clear guidance on whether policy makers plan to increase rates when they meet in September, or wait until December. Regardless, futures show traders are sticking to their bets that the pace will be even more gradual than the central bank forecasts.

"What's more important for the market is not when the Fed begins liftoff but when will be the second time the Fed raises rates," said Gary Pollack, who manages US$12 billion as head of fixed-income trading at Deutsche Bank AG's Private Wealth Management unit in New York. "That's the more critical question for the market because that will give us an idea of the Fed's pace and methodology in normalization."