Opinion: The market may still be underestimating the potential for tightening policies from the Federal Reserve.

Odaily Planet Daily News: T. Rowe Price Chief US Economist Blerina Uruci stated that the market might still be underestimating the possibility of further tightening by the Federal Reserve. In a report, Uruci noted that since early May, the conflict in Iran has lasted longer than expected, oil prices have risen, and U.S. economic growth has remained resilient. While the Fed can ignore temporary energy shocks, sustained pressure from oil and import prices could affect inflation expectations, wage dynamics, and corporate pricing behavior.

Uruci has shifted her main outlook to the federal funds rate remaining unchanged over the next 12 months. She estimates a 45% probability that the rate will stay the same, a 35% chance of a rate hike by the end of the year or early 2027, and a 20% probability of a rate cut. (Jin Shi)