Bond Traders Price In Mid-2027 Fed Hikes as 115,000 April Jobs Undercut Cut Bets
Updated
Updated · Crypto Briefing · Jun 2
Bond Traders Price In Mid-2027 Fed Hikes as 115,000 April Jobs Undercut Cut Bets
3 articles · Updated · Crypto Briefing · Jun 2
Summary
Mid-2027 Fed rate hikes are now appearing in swaps and futures curves, marking a sharp reversal from expectations just months ago that the central bank would be cutting rates.
June 5 payrolls are the next key test after April nonfarm payrolls rose 115,000, unemployment held at 4.3%, and wage growth stayed at 3.6%—levels seen as too firm to justify easing.
Oil's rise amid Middle East tensions, especially around Iran, has also tightened financial conditions by the equivalent of about 75 basis points of Fed tightening, reinforcing the shift.
July's FOMC meeting will be closely watched because new Chair Kevin Warsh could drop the Fed's easing bias, aligning official guidance with what bond markets are already pricing.
With inflation hot, can the new Fed Chair's AI theory prevent a rate hike reality?
As oil prices surge, has the Fed already lost control of the inflation narrative?
As US labor force growth stalls, is persistent inflation now the new normal?
Kevin Warsh Takes Helm as Fed Signals Rate Hikes in 2026: Inflation, Labor Market, and Global Shocks Drive Policy Pivot
Overview
In May 2026, Kevin Warsh became the new Federal Reserve Chair, triggering a major shift in policy outlook from expected rate cuts to a likely rate hike. This change, driven by rising inflation and low unemployment, caused markets to quickly adjust, with assets like Bitcoin dropping below $78,000. As the White House stepped back from pushing for rate cuts, the odds of a rate hike increased and market attention turned to economic data as the main guide for policy. Warsh’s appointment marks a new, more hawkish direction for the Fed, creating uncertainty and volatility in financial markets.