Investors worry that Middle East conflicts will reignite inflation, and markets are no longer fully betting on Fed rate cuts this year.

SmartContractAuditor · 2026-03-12T22:15:02+00:00

Bond traders have adjusted their expectations for Federal Reserve rate cuts in 2026, currently anticipating only 24 basis points of easing. Meanwhile, U.S. Treasury yields have risen, as market concerns have intensified regarding the potential for Middle East conflicts to trigger energy price increases and a resurgence in inflation.

SmartContractAuditor

2026-03-12 22:15:02

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Odaily Planet Daily News: Bond traders are no longer fully factoring in the Fed’s expectation of a rate cut in 2026. Interest rate swaps linked to Federal Reserve policy meeting dates show that traders expect only a 24 basis point rate cut this year on Thursday, less than a full 25 basis point cut, whereas Wednesday night’s expectations were around 30 basis points. This shift occurs as U.S. Treasury yields continue to decline, with the two-year Treasury yield, which is most sensitive to Fed policy changes, rising 4 basis points to nearly 3.70%. U.S. bonds are under pressure this week as investors worry that ongoing Middle East conflicts will continue to push energy prices higher, leading to a resurgence in inflation. (Jin10)

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