Recent market sentiment, influenced by robust U.S. economic data and hawkish remarks from policymakers including Jerome Powell, indicates a shift in expectations regarding U.S. Federal Reserve interest rate policies. Initially, markets anticipated multiple rate cuts throughout the year; however, current analyses and options market data suggest a growing likelihood of rate hikes instead. Analysts from Piper Sandler and PGIM highlight these factors as key drivers of this change. The options market now reflects a 20% chance of a rate increase within the next 12 months, a significant adjustment from earlier predictions, with traders increasingly betting on rate hikes.