Recent hotter-than-expected inflation readings, combined with resilient consumer spending and a stable labor market, have shifted market-implied odds toward a potential Federal Reserve rate hike later in 2026 or early 2027. The FOMC held the federal funds target range steady at 3.50–3.75 percent at its April 29 meeting amid elevated uncertainty from Middle East developments, with April minutes released May 20 noting a majority of officials now open to higher rates if price pressures persist. Traders in federal funds futures currently price in roughly even odds for a December move and over 60 percent probability of a 25-basis-point increase by January, reflecting the contrast between the Fed’s 2 percent inflation goal and recent data. The next policy decision arrives at the June 16–17 FOMC meeting, with upcoming CPI and employment reports serving as key inputs for rate path expectations.