By Chelsey Dulaney

The jump in oil and gas prices Monday continues to scramble investors' bets on central-bank interest rates.

A majority of investors now expect the Federal Reserve to cut interest rates just once this year, according to CME Group data. A week ago, investors had been expecting two cuts. And a growing minority expect no cuts at all: Derivatives markets show an 18% chance that the Fed keeps rates steady for the rest of the year, up from 8% a week ago.

Higher energy prices could increase inflation, leading central banks to hold rates higher to contain price pressures. The shift in expectations has led investors to sell government bonds around the world, pushing up borrowing costs.

In Europe, investors are increasingly pricing in rate rises. Derivatives markets show investors are pricing in almost two quarter-point rate-increases by the European Central Bank this year. Before the Iran conflict began, economists expected the central bank to hold rates steady this year with inflation projected to fall below its 2% target.

A growing number of investors are also betting that the Bank of England will raise rates by the end of the year. Markets had expected at least two rate cuts before the Iran conflict.

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(END) Dow Jones Newswires

March 09, 2026 09:40 ET (13:40 GMT)

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