Bond Traders See Increasing Chance of No Fed Cuts This Year

Bond options traders are increasingly betting that the Federal Reserve will forgo any rate cuts this year, as an intensifying conflict in the Middle East boosts oil prices and threatens to push up inflation.

Traders as of Wednesday were pricing in a 25% chance that the Fed will hold the benchmark interest rates within the current range by December, according to data compiled by the Atlanta Fed. That’s up from 17% on Friday, the last trading day before the Iran war kicked off.