Deutsche Bank: A sustained ceasefire in the Middle East may cause surging inflation to become a temporary phenomenon

According to Golden Ten Data on April 13, strategists at Deutsche Bank stated in a report that the US Treasury market will need to assess the extent of damage to US inflation following a ceasefire in the Middle East conflict. If the ceasefire can be maintained, the surge in inflation will be viewed more as a temporary phenomenon. Deutsche Bank's strategists said they expect the Federal Reserve to resume interest rate cuts starting in September. They also noted: “In addition, attention needs to be paid to the potential impact this war may have on Treasury issuance, as Congress may allocate more funds to the military.” Deutsche Bank's strategists anticipate that any increase in issuance will remain moderate and will be primarily financed at the long end, which will help avoid pressure on long-term yields.