Iran conflict de-escalation stabilizes inflation expectations, Fed rate cut unlikely

A Reuters poll shows global inflation concerns are easing as the Strait of Hormuz situation de-escalates. The market for the Fed decreasing interest rates by 25 bps after the June 2026 meeting sits at 4.2% YES, unchanged from a week ago. Lower oil prices and de-escalation in the Iran conflict have stabilized inflation expectations, reducing the likelihood of an aggressive Fed rate cut. June 2026 odds remain at 4.2% YES, with $5,970 needed to move the price by 5 points. The July 2026 market is priced at 86.5% YES, showing strong confidence that rates will hold steady. Actual USDC trading volume is thin: only $2,646/day in the June sub-market. The largest price move was a 46-point spike at 11:40 AM, likely a reaction to news rather than trading fundamentals.

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