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Markets Pricing in Potential Twin Rate Hikes Through 2027 as Economic Data Diverges

Fixed income strategists are pricing in the possibility of two Federal Reserve rate hikes through 2027. Jobless claims ticked up to 215,000 in recent weeks, signaling potential softening in labor market conditions. The divergence between employment trends and inflation expectations is forcing investors to reassess their outlook for monetary policy. Bond market participants are weighing the likelihood of rate action carefully. Real consumption patterns remain a key focal point for determining the Fed's next moves. Strategists across major asset managers are divided on timing and magnitude, with some expecting cautious central bank action given uncertainty around inflation dynamics and economic growth.