Recent April 2026 CPI data showing a 3.8% year-over-year rise—the highest since May 2023—driven by a 17.9% surge in energy prices amid Middle East developments, has reinforced trader expectations for fewer Federal Reserve rate cuts this year. With the federal funds rate steady at the 3.50%-3.75% target range following the April FOMC decision, markets currently assign roughly 70% odds of no easing through year-end according to CME FedWatch pricing. Elevated core inflation at 2.8% and lingering uncertainty around the Fed chair transition after Jerome Powell’s May 2026 term expiration further support a cautious policy stance. The next key catalyst arrives at the June 16-17 FOMC meeting, where updated economic projections and any signals on the neutral rate could shift the implied path for cuts.