The war didn’t just raise energy prices. It repriced the entire path of monetary policy.
On Wednesday, the ceasefire ran that logic in reverse.
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WTI crude crashed 18% to $92, the 10-year Treasury note yield, a key gauge of long-term growth and inflation expectations, fell about five basis points to 4.25%, its lowest level in roughly three weeks.
CME FedWatch odds for at least one Fed rate cut by year-end jumped from 25% to 34% overnight.
The industries and sectors most structurally dependent on lower rates, homebuilders, clean energy names and regional banks, led a broad Wednesday morning rally.
What Changed Overnight In Rate Cut Pricing
The sharpest way to read the repricing is the Polymarket “How many Fed rate cuts in 2026?” market, which captures real-money crowd-sourced probability across four outcomes.
Before the ceasefire, on the evening of April 7, traders assigned a 43% probability to zero Fed cuts in 2026, the dominant outcome, reflecting war-driven inflation fears.
The probability of one cut (25 bps) sat at 25%, two cuts at 16%, and three cuts at 10%.
By April 8 midday, after oil’s 18% collapse, the picture had shifted materially.
The probability of zero cuts fell from 43% to 33%, a 10-point swing in a single day.
