Dollar, Treasuries Have More Gains Ahead: Markets Analysis

Watch on YouTube ↗  |  September 17, 2026 at 07:32  |  3:08  |  Bloomberg Markets
Speakers
Mark Cudmore — Executive Editor, Bloomberg Live / Macro Strategist

Summary

Mark Cudmore analyzes the aftermath of a hawkish FOMC, arguing the shift restores Fed credibility and is not fully priced. He sees further upside for the dollar and Treasuries, with Treasury gains likely via curve flattening. He also expects oil downside, sterling pressure from a lagging Bank of England, and continued yen weakness despite a likely BOJ hike.

  • Fed delivered a hawkish FOMC with a unanimous hike and higher dot plot.
  • Speaker says restored Fed credibility is supportive for bonds.
  • Dollar expected to have more upside as hawkish shift is not fully priced.
  • Treasuries expected to rally, likely through curve flattening.
  • Oil seen as having asymmetric downside after risk-premium removal.
  • Bank of England seen behind the curve, pressuring sterling.
  • Bank of Japan may hike, but dollar-yen upward momentum remains intact.
Ideas
Mark Cudmore Executive Editor, Bloomberg Live / Macro Strategist 0:47
Hawkish Fed supports Treasury rally.
The hawkish FOMC restores Fed credibility and shows the central bank is taking its inflation mandate seriously, which is good for bonds. He expects Treasuries to rally from here, with the move potentially occurring through curve flattening, though he warns the rally may not go as far if the Fed raises rates more at the front end.
TLT HIGH
Mark Cudmore Executive Editor, Bloomberg Live / Macro Strategist 1:03
Fed credibility favors Treasury curve flattening.
He is surprised the Treasury curve has not flattened more and sees further Fed credibility and front-end rate pressure as supporting more flattening. Long-end bonds should rally, but the move may be smaller if the Fed hikes more at the front end.
US Treasury curve flattener MED
Mark Cudmore Executive Editor, Bloomberg Live / Macro Strategist 1:12
Oil has asymmetric downside risk.
He still sees oil prices as having asymmetric downside risk after the geopolitical risk premium came out last week. While the Middle East path is uncertain, he thinks the next big move in oil is lower.
WTI HIGH
Mark Cudmore Executive Editor, Bloomberg Live / Macro Strategist 1:31
Hawkish Fed supports more dollar upside.
The FOMC was a hawkish shift that is not fully priced in yet, and the restoration of Fed credibility should support further dollar upside. The move is reinforced by upward pressure on front-end yields globally.
USD HIGH
Mark Cudmore Executive Editor, Bloomberg Live / Macro Strategist 2:52
BOE lag pressures sterling lower.
The Bank of England is one of the few central banks not priced to hike at its immediate meeting, putting it behind the curve. That should put more pressure on sterling.
GBP HIGH
Mark Cudmore Executive Editor, Bloomberg Live / Macro Strategist 2:56
BOJ hike won't reverse yen weakness.
The Bank of Japan will hike, but it will need a very hawkish hike to change the upward momentum in dollar-yen, which has fully restored itself. This should keep pressure on the yen.
USD/JPY MED
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This Bloomberg Markets video, published September 17, 2026, features Mark Cudmore discussing TLT, US Treasury curve flattener, WTI, USD, GBP, USD/JPY. 6 trade ideas extracted by AI with direction and confidence scoring.

Speakers: Mark Cudmore  · Tickers: TLT, US Treasury curve flattener, WTI, USD, GBP, USD/JPY