Markets are starting to shift expectations again. There’s now roughly a 33% chance that the Federal Reserve could hike rates before January 2027, while the possibility of a rate cut this year has dropped to zero.
The main reason? Inflation fears are creeping back in, largely fueled by rising energy prices globally.
If this trend continues, risk assets like stocks and crypto could be the first to feel pressure, as tighter financial conditions typically drain liquidity from the market. In that kind of environment, any real recovery might only come after a deeper economic slowdown or even a broader recession.
At the same time, Donald Trump is signaling a completely different outlook, adding another layer of uncertainty to where markets could head next.