TechFlow News, March 2: According to JIN10 Data, amid rising oil prices and inflation concerns triggered by the Middle East conflict, money markets on Monday scaled back bets on interest rate cuts by the U.S. Federal Reserve, the Bank of England, and the European Central Bank. Swap contracts tied to policy meeting dates now indicate that the probability of three Fed rate cuts in 2026 has fallen from nearly 50% last week to just 20%. Traders no longer expect the Bank of England to deliver three rate cuts this year and have reduced the odds of a March cut from above 80% to 60%. They have also halved the implied probability of an ECB rate cut this year, pricing in only a 5-basis-point reduction. Yields on the two-year government bonds of the U.S., U.K., and Germany—the most sensitive to monetary policy shifts—rose more sharply than longer-dated yields. This reflects a sharp jump in inflation indicators, driven by Brent crude oil posting its largest four-year gain. Laura Cooper, Global Investment Strategist and Head of Macro Credit at Nuveen Investments, stated: “Persistent oil price increases will exert a significant premium effect on the global economy and inflation trajectory. A more durable energy shock could complicate the disinflation process and delay further rate cuts.”
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