US-Iran Negotiations Collapse Boost Inflation Expectations: Rate Cut Bets Postponed, Global Bond Market Under Pressure

BlockBeats News, April 13th: The U.S.-Iran negotiation collapsed, coupled with the potential blockade risk in the Strait of Hormuz, triggering market concerns about energy price spikes and inflation rebound, further weakening the market's expectation of a Fed rate cut this year. Current traders have postponed the timing of the next rate cut to mid-2027.

Latest data shows that the U.S. March CPI rose by 0.9% month-over-month, the largest increase since 2022, pushing the 10-year U.S. Treasury yield above 4.3% and further rising to around 4.35% in the latest trading day. Meanwhile, Japan's 10-year government bond yield rose to a new high since 1997, and the yields of Australian and New Zealand government bonds also increased simultaneously, putting pressure on the global bond market as a whole.

Institutional views generally believe that the rise in energy prices is creating a "supply-side inflation shock." Against the backdrop of a resilient labor market, the Fed lacks the urgency to cut rates in the short term. Institutions such as PIMCO, Brandywine Global, and Natixis tend to maintain a wait-and-see attitude, waiting for a clearer path of inflation.

The market narrative has shifted from recession worries to inflation dominance. If oil prices continue to operate at high levels or prolong the high-interest-rate environment cycle, this may suppress the overall performance of financial assets.