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2026-05-29 11:49:37
[Economist: Market May Underestimate the Possibility of Further Fed Tightening] (1) Blerina Uruci, chief U.S. economist at T. Rowe Price, said the market may still be underestimating the possibility of further Fed tightening. (2) Since early May, the Iranian conflict has lasted longer than expected, oil prices have risen, and U.S. economic growth has remained resilient. While the Fed can ignore the temporary energy shock, continued pressure on oil and import prices could affect inflation expectations, wage dynamics, and corporate pricing behavior. (3) Uruci estimates a 45% probability that the federal funds rate will remain unchanged over the next 12 months, a 35% probability of a rate hike by the end of the year or early 2027, and a 20% probability of a rate cut.
