Inflation Hit is Coming: Kathy Jones

Bond markets reacted sharply as US Treasuries fell amid rising inflation concerns tied to geopolitical tensions in the Middle East. Kathy Jones, Schwab’s chief fixed income strategist, warned of mounting inflation risks during a Bloomberg interview, citing prolonged conflict as a key driver. Traders now assign a 50% probability to a Federal Reserve interest-rate hike by October, up from prior estimates, reflecting escalating economic uncertainty. The selloff in Treasuries signals investor anxiety over potential supply chain disruptions and energy price spikes stemming from the Middle East conflict. Jones’ analysis underscores how geopolitical instability is reshaping monetary policy expectations, forcing markets to price in higher borrowing costs sooner than anticipated.