Svmuu News: Leslie Falconio, currently Head of Taxable Fixed Income Strategy for Global Wealth Management at UBS, stated that pressure on the Federal Reserveto raise interest rates this year is easing following the announcement by the U.S. and Iran that they had reached an agreement to reopen the Strait of Hormuz, which has suppressed oil prices and triggered a rally in the U.S. Treasury market. Leslie Falconio noted that even as oil prices fell prior to the ceasefire, “two-year yields were still rising because the market was pricing in a near-100% probability of a rate hike in December 2026.”“What’s happening now is that oil prices are falling, but the market is pricing out those rate hike expectations. That’s why the two-year yield is declining.” Federal Reserve New Chair Kevin Warsh will preside over his first interest rate policy meeting this week. As surging crude oil prices have accelerated inflation, support within the Federal Open Market Committee (FOMC) for raising rates this year has grown. Leslie Falconio expects the FOMC to formally abandon its dovish stance at this week’s meeting, thereby fostering a more hawkish outlook.However, she said she still expects the next move to be a rate cut, sometime in 2027. (Bloomberg)