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Iran hostilities resume, lifting oil and bond yields
Futures pricing implies a 36.0% chance of a Fed rate hike at the meeting, signaling elevated volatility expectations.
Mortgage News Daily said a U.S. and Iran pause over the weekend boosted bond-market sentiment, but the pause ended after multiple attacks were reported on both sides in the overnight session.
With fighting reportedly escalating again, oil rose and bond yields moved higher, according to Mortgage News Daily.
The outlet added that the Fed’s path in 2026 is less likely to change, even as futures pricing shows a 36.0% chance of a hike today. Mortgage News Daily said that odds level, combined with shifting forward guidance and the highly variable inflation effects of fuel prices, points to higher-than-usual volatility at this meeting.
Mortgage News Daily also noted that there is no dot plot scheduled for the July Fed meeting, and it remains unclear whether upcoming changes under the Warsh Fed will phase out or modify the dot plot.