Overview
- Traders now price a real chance that the Federal Reserve raises interest rates within the next year.
- Bond yields jumped above 5% on key U.S. Treasury maturities, signaling expectations that rates will stay higher for longer.
- Market odds of any Fed rate cut in 2026 fell to about 8%, based on CME’s FedWatch readings cited in the coverage.
- ECB officials, led by Bundesbank President Joachim Nagel, said a June rate increase is on the table if inflation prospects fail to improve.
- Bundesbank board member Michael Theurer warned the Middle East war is lifting energy costs and could keep euro-area inflation near 3%, pressuring growth and household budgets.