By Chelsey Dulaney
Investors are reviving bets that the Federal Reserve could cut interest rates this year after the U.S. and Iran agreed to a two-week cease-fire.
Investors now see a 43% chance of at least one rate cut by December, up from 14% a day ago, according to CME Group data. Market expectations for Fed policy have swung dramatically since the war began, as investors shifted from expecting multiple cuts this year to pricing in a chance of a rate increase.
While a rate hike is now fully priced out, investors aren't returning to their prewar outlook of multiple rate reductions. Uncertainty over the cease-fire remains high, and relieving the logjam in global oil and gas markets could take months once the Strait of Hormuz reopens. That means elevated energy prices could continue to drive up inflation in the months ahead.
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(END) Dow Jones Newswires
April 08, 2026 05:42 ET (09:42 GMT)
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