Bond Investors Seem to Embrace Idea of Potential Fed Rate Hike in 2026 -- Market Talk

Dow Jones05-15

0512 GMT - Bond investors must be prepared for the Federal Reserve to increasingly shift their focus to the inflation side if the blockade of the Strait of Hormuz isn't resolved in the near future, LBBW's Elmar Voelker says in a note. This is already reflected to a certain extent on money markets, with the market consensus now assigning an around 40% probability to a Fed rate hike by the end of 2026, the senior fixed income analyst says. This compares to last week's pricing of almost flat interest rate expectations, he says. "If there is no new movement in the Middle East conflict following the Trump-Xi summit, rate hiking speculation could pick up again." (emese.bartha@wsj.com)

 

(END) Dow Jones Newswires

May 15, 2026 01:12 ET (05:12 GMT)

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