BlockBeats news: On January 16, as 2026 began, concerns in the market over a renewed acceleration in inflation have clearly intensified. Several fund managers have warned that surging metal prices, AI-driven increases in energy and infrastructure costs, and the uncertainty regarding the independence of the Federal Reserve Chair, who will be replaced by Trump in May, could cause inflation this year to significantly exceed previous expectations.
Currently, inflation remains above the Federal Reserve's 2% target. If price pressures intensify further, the market's expectation of two rate cuts (25 basis points each) in 2026 may become difficult to realize, and there could even be a risk of no rate cuts at all for the entire year.
Although U.S. equity and bond markets have not yet fully priced in this risk, some institutions have already begun adopting defensive strategies. Several investors noted that if the 10-year U.S. Treasury yield breaks through 4.3%, it could become an important warning signal for inflationary pressures and stress in financial markets.