Powell Goes Hawkish: Rate Cut Expectations Plummet, US Treasuries Sold Off, Yields Soar

MarsBitNews · 2026-03-19T01:04:59+00:00

Federal Reserve Chair Powell's hawkish remarks have significantly dampened market expectations, stating that rate cuts will not occur before inflation shows substantial decline, triggering a sell-off in U.S. Treasuries and rising yields. Market enthusiasm for rate cuts has cooled, with discussions even turning toward rate hikes. Analysts attribute this to Middle East tensions pushing up oil prices and exacerbating inflationary pressures.

MarsBitNews

2026-03-19 01:04:59

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Mars Finance News, March 19 — Federal Reserve Chair Jerome Powell’s latest hawkish stance has dealt a blow to market expectations. After the second consecutive pause in rate hikes, Powell explicitly stated that he will not cut interest rates until there is a significant decline in inflation, directly shattering market illusions. As a result, U.S. Treasuries experienced a sell-off: the 2-year Treasury yield rose to about 3.78%, a 7-month high; the 10-year yield increased to 4.27%.

Market expectations for interest rate cuts have quickly cooled, with the probability of one rate cut this year approaching 50/50, and discussions of a possible rate hike have even emerged. Analysts believe that the Middle East conflict has driven up oil prices, intensifying inflation pressures and prompting the Fed to adopt a more cautious policy stance. Previously, the market had largely bet on multiple rate cuts, but this has been reversed, leading to increased volatility in the bond market.

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