Elevated inflation pressures, highlighted by the April 2026 CPI rising 3.8% year-over-year—the highest since May 2023—have anchored trader expectations for limited or no Federal Reserve easing this year. Energy costs surged amid Middle East geopolitical tensions, pushing the headline rate above consensus while core measures also edged higher, reinforcing the FOMC’s April decision to hold the federal funds rate steady at 3.50%-3.75%. A resilient labor market, with unemployment near 4.3%, has further reduced the urgency for cuts. Market-implied pricing now heavily favors zero reductions through year-end. The June 16-17 FOMC meeting, alongside the May CPI release on June 10, represent key near-term catalysts that could shift the rate path if incoming data alter the inflation or employment trajectory.