Rate cut expectations went from 4-5 cuts in early 2025 to a 21% chance of even ONE cut in 2026. That's not a shift, that's a full narrative collapse.
Growth held up. Consumer spending didn't crack. Inflation stayed sticky. Labor market still tight. So now the market's pricing in "higher for longer" like it's the new baseline.
This matters more than people think. Mortgage rates, corp debt, equity valuations — everything reprices when the Fed isn't coming to save you. Bulls who were banking on cuts are now staring at a world where capital actually costs something again.
Bond market's already adjusting. Question is whether this is the "no landing" everyone feared or just another head fake before something breaks.
We'll know soon enough.
Growth held up. Consumer spending didn't crack. Inflation stayed sticky. Labor market still tight. So now the market's pricing in "higher for longer" like it's the new baseline.
This matters more than people think. Mortgage rates, corp debt, equity valuations — everything reprices when the Fed isn't coming to save you. Bulls who were banking on cuts are now staring at a world where capital actually costs something again.
Bond market's already adjusting. Question is whether this is the "no landing" everyone feared or just another head fake before something breaks.
We'll know soon enough.