Fixed Income Outlook: Rate Hike Likelihood Increasing (with Vonnie Quinn)

Henrietta Pacquement sees increasing likelihood of a rate hike due to persistent inflation from Middle East conflict and a strong economy. She is adding to short-duration positions as yields become attractive, while avoiding the long end due to multiple uncertainties.

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Allspring Global Investment 7.8
Asset Manager $500.00B
Henrietta Pacquement 7.5

Fixed Income Outlook: Rate Hike Likelihood Increasing (with Vonnie Quinn)

yields

The likelihood of a rate hike is increasing.

5 calls

no reliable edge (random outcomes)

3/27/2026 2:05:36 PM	medium term up	21 days later	-2.12%	-2.12%
1/28/2026 2:19:14 PM	medium term cautious down	20 days later	-3.50%	+1.75%
12/19/2025 8:24:36 AM	medium term up	21 days later	+0.43%	+0.43%
9/3/2025 8:33:02 PM	short term cautious down	5 days later	-2.44%	+1.22%
8/29/2025 10:13:54 PM	medium term cautious down	20 days later	-3.13%	+1.57%

Show all 5 yields results

Vonnie Quinn

After the jobs report, the market has fully priced in a rate hike. What is the likelihood we get one this year?
Henrietta Pacquement

The likelihood of a rate hike is increasing, driven by persistent inflation from the Middle East conflict and a strong economy.
Vonnie Quinn

Kevin Warsh will tout productivity. Why would he argue for a rate increase?
Henrietta Pacquement

The new Fed chair's reaction function is unknown. The conflict has lasted longer, energy prices are higher, and this could broaden inflation. Growth is less clear due to pulled-forward consumption, but animal spirits in M&A are strong.
Vonnie Quinn

What are you looking for in tomorrow's CPI? Consensus is 4.2%.
Henrietta Pacquement

The market knows the drivers. The key is the breadth of inflation and the resolution in the Middle East, which impacts energy prices. We also need to be careful about 'greed inflation'.
Vonnie Quinn

The curve is flattening with the front end coming up and the long end stuck. Is this the trend?
Henrietta Pacquement

The front end is driven by rate hike expectations. The long end is a safety valve for inflation expectations and deficit anxiety. We are steering away from the long end due to multiple elements at play.
Vonnie Quinn

Are you adding at the short end?
Henrietta Pacquement

Yes, we have been adding on the short side as rate hikes have been priced in. We are also looking globally at other jurisdictions with different dynamics.

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