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 $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.”

The Fed’s June 17 rate projections show the median forecast for their benchmark rate at 0.625 percent by year-end, rising to 1.625 percent in 2016. Markets aren’t pricing in a second rate increase until June 2016, according to Royal Bank of Scotland Group Plc.

The U.S. 10-year note yield rose three basis points to 2.31 percent as of 1:45 p.m. Thursday in Tokyo, according to Bloomberg Bond Trader data. The 2.125 percent security due in May 2025 fell 7/32, or $2.19 per $1,000 face amount, to 98 11/32.

Payroll Report

The attention of investors now shifts to next week’s employment report, which will show an increase of 220,000 jobs in July with average hourly earnings rising 0.2 percent, according to the median estimate of economists surveyed by Bloomberg.

The Fed is navigating uncharted waters as it trying to step back from more than six years of virtually zero interest rates. Those efforts are complicated by bond-market inflation expectations, which are the lowest since January as prices for commodities including oil have plunged amid turmoil in China’s stock market.

“The labor market continued to improve, with solid job gains and declining unemployment,” the Federal Open Market Committee said in Wednesday’s statement. It said that “underutilization of labor resources has diminished,” dropping the modifier “somewhat” to describe the change.

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