Fixed income markets now assign roughly a one‑third chance that the Federal Reserve will raise interest rates at its July 28‑29 meeting, as rising energy prices and a more hawkish tone from policymakers keep inflation risks front and center.

In recent speeches, Fed policymakers have said that if inflation does not cool soon, then interest rates may have to increase. At a speech on July 15, Fed Governor Lisa Cook underlined potential inflation risks, “I am watching both sides of our dual mandate—price stability and maximum employment. However, as I have stated at several points this year, the risks from high inflation concern me more at this time. Even though this week's consumer price index and........

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