Bloomberg Surveillance · Friday, July 10, 2026
An analyst questions what 'hawkish' truly means in the current market, noting that while the Fed may be signaling tighter policy, market pricing with one hike followed by cuts suggests risk management rather than extreme hawkishness. The expectation is that the Fed will eventually return to a neutral stance around three percent.
“Yeah? Well, the thing is interesting, I mean, what does al hawk mean? When you look at the WRP page on Bloomberg you have the market pricing in one hike and then followed by cuts that to me looks like risk management. Doesn't look like a market that's really that hawk ish. They're just scared of this unknown. Then there may be a risk of a hike. I don't buy it if you have a base case.”
“So we think that defends on hold and in fact that they're going to end up coming back to square one, which is that neutral still is somewhere close to three percent, and at the end of the year, this is going to be a big exercise in like just kind of figuring out that we're coming back towards three percent.”