Recent inflation readings, including the March CPI increase driven by energy prices amid Middle East tensions, have shifted trader focus toward potential Federal Reserve rate hikes as early as late 2026 or early 2027. The FOMC held the federal funds target range steady at 3.50-3.75 percent in its April 29 meeting, with the decision drawing multiple dissents and underscoring data dependence. Resilient labor market conditions and robust consumer spending have further tempered expectations for near-term easing, while incoming Chair Kevin Warsh’s tenure introduces additional policy uncertainty. Market-implied odds from futures reflect a modest upward revision in the expected policy path, though the next FOMC meetings in June and July remain key catalysts for clarifying the trajectory.