Mei Xi | Traders Estimate 50% Probability of Fed Rate Hike in October

SighingCashier · 2026-03-20T18:20:05+00:00

Iran conflict escalation drives international oil prices higher, fueling inflation concerns and triggering a global bond selloff with rising yields. Traders have adjusted the probability of a U.S. October rate hike to 50%. UK 10-year gilt yields reached 0.5%, signaling the market is repricing its interest rate and inflation trajectory. U.S. 10-year Treasury yields hit their highest levels since last year.

SighingCashier

2026-03-20 18:20:05

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The escalation of the Iran conflict has caused a sharp rise in international oil prices, fueling inflation concerns. The global bond market has experienced a sell-off, with bond yields rising accordingly. Traders have increased the probability of a rate hike by the Federal Reserve in October to 50%, completely reversing previous expectations of rate cuts, which market participants believed would happen twice this year by 0.25 percentage points each.

UK 10-Year Bond Yield Hits 5%

The UK 10-year government bond yield has reached 5% for the first time since 2008. European and major global bond yields are rising in tandem, indicating that markets are repricing interest rate and inflation expectations. Reports suggest that the European Central Bank may begin discussing rate hikes as early as April, with tightening measures possibly implemented in June.

The US 10-year Treasury yield briefly surged 11.2 basis points to 4.395%, the highest level since August last year; the 2-year Treasury yield increased by 10.3 basis points to 3.936%.

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