FX Files – Markets on Edge Ahead of the Fed

FICC Strategy Reports

The week began with global yields rising, equities moving lower, the USD strengthening, and risk assets broadly under pressure. Higher oil prices contributed to the weaker backdrop as markets await tomorrow’s Fed decision. The bond selloff also intensified, with the 10-year U.S. Treasury yield reaching 5.03%, its highest level since 2007. Markets now fully price two Fed rate hikes by year-end—including a 92% probability of a hike tomorrow—and 93 bps of cumulative tightening by end-July 2027, up from 60 bps at the start of last week

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