Recent hotter-than-expected inflation has shifted trader sentiment firmly against near-term Federal Reserve rate cuts. The April 2026 CPI rose 0.6 percent month-over-month and 3.8 percent year-over-year—the largest annual gain in nearly three years—driven primarily by a 17.9 percent surge in energy prices amid Middle East geopolitical tensions. With the federal funds target range held at 3.50-3.75 percent at the April 29 FOMC meeting, market pricing via CME FedWatch now assigns virtually no probability to a cut through year-end 2026 and places the next move in 2027 or later. Resilient labor market data and above-target core inflation readings have reinforced the Fed’s data-dependent stance, while the June 17-18 FOMC and upcoming CPI releases remain key near-term catalysts that could further embed or alter the current hawkish tilt in implied probabilities.