Surging oil prices and rising geopolitical tensions are reigniting inflation worries, while traditional safe-haven assets begin to show signs of कमजोरी.

Just weeks ago, markets were focused on how aggressively the Federal Reserve might cut rates in 2026. That narrative is now shifting. With the U.S. economy showing only mild signs of slowing, inflation still above the Fed’s 2% target, and oil prices jumping 50% in three weeks, traders are beginning to consider the possibility of a rate hike as early as April.

CME FedWatch data highlights the shift in sentiment, with the probability of a rate increase at the next Fed meeting rising to 12%, up from 0% just a week earlier. This marks a sharp turnaround from two months ago, when expectations leaned firmly toward a rate cut during that same period.

February inflation data further complicates the outlook. Headline inflation came in at 2.4% year-over-year, with core inflation at 2.5%—figures recorded before the escalation of the Iran conflict and the sharp spike in oil prices.

Bond markets are reacting quickly. The yield on the U.S. 10-year Treasury rose another 10 basis points on Friday to 4.38%, compared to below 4% at the beginning of March. The sell-off is being mirrored globally. In the U.K., 10-year gilt yields have surged above 5%, climbing 15% over the past month to their highest levels since 2008.

Equity markets have yet to see a sharp breakdown, but pressure is building. The S&P 500 slipped 0.9% on Friday, putting it on track for a fourth consecutive weekly decline and leaving it down more than 5% since late February. The Nasdaq has followed a similar path, dropping 1.2% on the day.

Precious metals, which rallied strongly ahead of the geopolitical tensions, are now pulling back. Gold has dropped from around $5,500 per ounce at the start of the month to $4,569, while silver has fallen from $95 to $69.50 per ounce.

Bitcoin, however, is drawing attention for its relative strength. Andre Dragosch, European Head of Research at Bitwise, described it as a “canary in the macro coal mine,” suggesting it may already be pricing in recession risks that traditional markets have yet to fully reflect.

Trading near $70,000, Bitcoin has edged higher since early March and remains one of the top-performing assets since geopolitical tensions intensified.