Oil Price Decline Not Yet Reflected in Rate Markets, Jefferies Says

According to Jefferies, oil prices have declined recently, but rate markets have not quickly adjusted their expectations to account for the decline, said Mohit Kumar in a report. The analyst noted that oil prices have fallen more than expected as markets focus on increased shipping traffic through the Strait of Hormuz. Jefferies maintains that a key impact of a U.S.-Iran agreement would be that major central banks no longer need to raise rates, keeping the Federal Reserve on track to hold rates steady this year, with the next move being a rate cut rather than an increase.
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