Bond traders are ramping up bets that the Federal Reserve will raise interest rates before considering any cuts, with current swaps indicating more than a 50% chance of a rate hike by April 2024. This shift comes as Kevin Warsh prepares to take over as Fed Chair, amid a divided outlook among policymakers regarding interest rates. Lawrence Gillum, chief fixed-income strategist at LPL Financial, noted that the chances of a rate cut this year are declining, particularly in light of ongoing geopolitical tensions, such as the conflict in Iran. As traders hedge against rising rate-hike odds, the swaps market has seen the likelihood of lower rates pushed out to early 2028. The June 2027 contracts have underperformed recently, indicating traders are not fully pricing in potential rate increases until later. The Treasury market is also experiencing a bearish shift, with a survey showing an increase in short positions among investors, as the yield on 30-year US government debt hovers around 5%.