BlockBeats News, June 15th, Leslie Falconio, Head of Taxable Fixed Income Strategy at UBS Global Wealth Management, stated that after the US and Iran announced an agreement, oil prices fell sharply, leading to a strengthening of the US Treasury market and a reduction in the pressure for a rate hike by the Federal Reserve this year.

Falconio said, "Even though oil prices had already started to fall before the ceasefire agreement was reached, the yield on the two-year US Treasury note continued to rise because the market had priced in an almost 100% probability of a rate hike in December." "Currently, as oil prices are falling, the market is gradually unwinding these rate hike expectations. Therefore, the yield on the two-year US Treasury note is starting to decline."

The new Fed Chair, Powell, will chair his first interest rate decision this week. Against the backdrop of soaring oil prices reigniting inflationary pressures, the voices within the FOMC favoring a rate hike this year have been increasing. Falconio stated that she expects the FOMC to formally abandon its dovish stance at this week's meeting, making the policy outlook more hawkish. However, she still believes that the Fed's next move will be a rate cut, and the timing will be in 2027. (FX Street)