**[Traders Bet the Fed May Be Forced to Raise Rates in the Coming Weeks]** Golden Finance reported on March 27 that bond traders, alarmed by the potential escalation of the Iran conflict, are seeking to hedge against the worst-case scenario of war consequences—namely, the Federal Reserve being forced to raise interest rates in the coming weeks. In the options market tracking Fed policy, demand for bets tied to the Secured Overnight Financing Rate (SOFR) has emerged, reflecting scenarios where rate hikes could occur as early as two weeks from now. If the bond market significantly raises rate hike expectations before the Fed's policy meeting on April 29, these trades stand to profit. The surge in hedging demand for emergency rate hikes marks a sharp reversal in market sentiment. Just a month ago, the market was anticipating up to three 25-basis-point rate cuts by the end of the year. Since the outbreak of war on February 28, swap market traders have begun pricing in about a 50% probability of rate hikes before December, putting short-term U.S. Treasuries at risk of further repricing. Jeff Schuh, head of the rates division at Constitution Capital, stated that while the latest bets do not reflect the market's baseline scenario, they do highlight growing concerns that rapidly rising inflation could pose risks to investors who have been long on U.S. Treasuries in recent months. Schuh noted that as surging oil prices reignite inflation fears, traders have closed a significant number of long positions in U.S. Treasury futures. The sell-off in SOFR futures and the upward movement across the U.S. Treasury yield curve have caught many large funds off guard. He pointed out that for funds seeking to manage interest rate risks, such trades "make blow-up risks appear more manageable in 90% of cases and serve as a cheap stopgap measure."