Recent hotter-than-expected April 2026 CPI prints and resilient labor market data have driven traders to sharply reduce expectations for near-term Federal Reserve easing, with futures markets now pricing a higher probability of rate hikes by early 2027 than cuts through year-end. Elevated energy prices tied to ongoing Middle East tensions have kept inflation above the Fed’s 2% target, prompting major banks including BofA and Goldman Sachs to push their first projected 25-basis-point cut into 2027 or later while the effective federal funds rate holds near 3.63%. The next FOMC meeting on June 16–17 and the June CPI release represent key near-term catalysts that could further shift market-implied odds depending on incoming data.