Persistent inflation pressures above the Federal Reserve’s 2 percent target, driven by energy price spikes from Middle East tensions, have kept the federal funds rate steady at 3.50–3.75 percent through the April FOMC meeting and priced in limited policy shifts for the remainder of 2026. A resilient labor market with unemployment near 4.3 percent and solid growth expectations have tempered immediate hike bets, creating the narrow 52.5 percent market-implied probability against any 2026 rate increase. Traders are balancing these factors against the risk that oil-driven price pressures could force tighter policy later in the year. The June 16–17 FOMC decision and subsequent inflation and employment releases will provide key signals on whether the current hold stance persists or shifts toward a hike.