ING analysts expect the Federal Reserve to maintain rates but warn a 30% chance of a hike could push shorter-dated EUR and GBP yields higher.
ING’s Michiel Tukker anticipates the Federal Reserve will keep rates unchanged, though markets assign a 30% probability to a hike. The decision is expected to drive volatility in U.S. rates and influence global yield curves.
Shorter-dated yields in EUR and GBP markets may rise further on a hawkish tilt, while longer-dated rates could face resistance if financial conditions tighten. Markets remain divided on the Fed’s next move, with sentiment sensitive to both a hold or a surprise hike.
Risk assets could decline if the Fed hikes, tightening financial conditions. Equities are already showing jitters amid AI-related uncertainties, adding to market unease ahead of the decision.