Bank of America Global Research argues that US labor data suggests hike risk should be higher.

'The US rates market puts very low risk (5bp) of near-term Fed rate hikes despite solid US employment data. Many in the market believe there is a high bar for Fed hikes given (1) dovish incoming new Fed Chair Warsh (2) median Fed member that believes policy restrictive vs 3% anchor (3) slowdown concern / Iran resolution optimism," BofA notes.

"Our counter to market belief in high hike bar: (1) Warsh is only one individual vs shifting FOMC tide (2) financial & US economic conditions do not suggest policy is restrictive (look at equities & US corporate earnings) (3) consumer spending has been robust. In this note we explore US rate implications shifting Fed hike risk," BofA adds.