War Pushes Expectations of Rate Cuts Up Sharply, Likelihood of Fed Cutting Rates 3 Times in 2026 Falls to 20%

BlockBeats News, March 2nd, as the Middle East conflict boosted oil prices and stoked inflation concerns, the currency markets in the US, UK, and Eurozone scaled back bets on rate cuts.

According to swaps tied to policy meeting dates, the likelihood of the Fed cutting rates three times in 2026 dropped from nearly 50% last week to 20%. Traders no longer expect the Bank of England to cut rates three times this year, reducing the probability of a March rate cut from over 80% to 60%. They have also halved the odds of the ECB cutting rates this year, pricing in only 5 basis points.