Bond traders price Fed hikes that some investors say may not happen

After newly appointed Fed Chair Kevin Warsh struck a more forceful anti-inflation tone, markets sharply lifted expectations for rate increases this year, helping flatten the U.S. Treasury yield curve. Forecasts have diverged, with Citi projecting a cut as soon as October while BofA Securities expects three 25-basis-point hikes this year. The report argues inflation pressures are currently driven mainly by oil-price swings; if oil supply normalizes and the labor market cools, inflation could retreat quickly and reduce the case for hikes.