CME FedWatch Tool Shows 62.6% Probability of No Rate Change in July, 37.4% for 25 bps Hike

No change rises to 76%2%

Market data from CME FedWatch on June 24 indicated a 62.6% chance that the Fed would hold rates steady in July and a 37.4% chance of a 25 basis point increase. This reflected ongoing uncertainty but a tilt toward a possible modest hike, consistent with Fed communications and inflation data.

Bank of America revises forecast to three rate hikes in 2026

25 bps increase drops to 18%8%

On June 22, Bank of America analysts updated their forecast to predict three quarter-point rate hikes by the Fed in 2026, lifting the benchmark rate to 4.25%-4.5%. This hawkish outlook reinforced market expectations for rate increases rather than cuts.

Fed maintains interest on reserve balances, reinforcing steady policy stance

No change rises to 74%2%

Following the June FOMC meeting, the Federal Reserve Board voted unanimously to maintain the interest rate paid on reserve balances at 3.65%, supporting the steady monetary policy stance and reinforcing market expectations of no immediate rate changes at the July meeting.

Fed officials signal reduced urgency for rate cuts amid stronger growth and inflation

25 bps increase drops to 82%11%

On June 18, 2026, Federal Reserve communications indicated that recent data showed stronger economic growth and inflation remaining somewhat elevated, reducing the likelihood of imminent rate cuts. This led markets to sharply lower the probability of no change and increase the odds of a 25 bps rate hike in July.

Federal Reserve holds rates steady but signals rate hike ahead

25 bps increase dips to 25%2%

At its June 17 meeting, the Fed kept rates unchanged at 3.50%-3.75% but the Summary of Economic Projections showed a median forecast of 3.8% for year-end 2026, implying at least one rate hike. The Fed removed easing bias language, signaling a hawkish stance amid persistent inflation.

Fed Projections Turn Hawkish Amid Persistent Inflation

No change plunges to 75%18%

The Summary of Economic Projections showed a median federal funds rate forecast for 2026 increased, with nine of 19 policymakers now anticipating a rate hike by year-end 2026.

Federal Reserve Holds Interest Rates Steady at 3.50%-3.75%

No change plunges to 75%18%

The FOMC maintained the federal funds rate unchanged in a unanimous 12-0 vote, signaling a pause in rate cuts despite elevated inflation, marking the first decision under new Chair Kevin Warsh.

Warsh Launches Hawkish Review of Fed Forward Guidance

No change plunges to 75%18%

Chairman Kevin Warsh initiated a review of the Fed's communication strategy, opting for a stripped-down policy statement that removed forward guidance on future rate decisions.

Fed's Summary of Economic Projections shows hawkish shift with rate hikes expected

25 bps increase surges to 27%22%

Alongside the June 17 rate decision, the Fed released updated economic projections (dot plot) showing nine of 19 policymakers anticipate at least one rate hike by the end of 2026, a shift from prior expectations of cuts. Inflation forecasts were raised, and GDP growth was slightly lowered, signaling a more cautious and hawkish stance that influenced market pricing toward a 25 bps increase in July.

Federal Reserve holds rates steady at 3.50%-3.75% in Kevin Warsh's first meeting

No change dips to 92%1%

The Federal Open Market Committee unanimously decided to maintain the target range for the federal funds rate at 3.50% to 3.75%, citing solid economic expansion despite elevated inflation and geopolitical uncertainty. The statement was notably shorter, removing forward guidance, signaling a more data-dependent approach. This reinforced market expectations of no immediate rate changes but introduced hawkish projections for potential hikes later in 2026.

Fed Shortens Policy Statement and Removes Easing Bias

No change plunges to 77%16%

The FOMC released a stripped-down policy statement that completely removed its previous forward guidance and easing bias, signaling a return to a simpler, data-dependent format under new Chair Kevin Warsh. This change led to a sharp drop in the probability of the 'No change' outcome as markets priced in a higher-for-longer rate path.

Fed holds rates steady in Kevin Warsh's first meeting, signals possible hike later in 2026

No change plunges to 74%19%

At the June 16-17 FOMC meeting, the Federal Reserve kept the federal funds rate at 3.50%-3.75%, but raised inflation projections and removed easing bias from its statement. The median forecast for the federal funds rate increased to 3.8% for 2026, indicating a potential 25 bps hike later in the year. This hawkish tone caused the market price for 'No change' to dip slightly and the price for a 25 bps increase to rise toward the end of the analysis window.

Kevin Warsh begins Fed chairmanship with hawkish policy stance

No change drops to 81%12%

New Fed Chair Kevin Warsh's first meeting featured a unanimous decision to hold rates steady but removed forward guidance favoring cuts, emphasizing a data-dependent approach and signaling readiness for future hikes. This reinforced market expectations of no cuts and increased the likelihood of a 25 bps hike later in 2026.

Fed Holds Rates Steady but Hawkish Dot Plot Signals Possible Hike in 2026

25 bps increase surges to 21%18%

At Chairman Kevin Warsh's first rate-setting meeting, the FOMC unanimously voted to maintain the federal funds rate at 3.50%-3.75%. However, the updated dot plot showed a hawkish shift, with nine of 18 officials projecting at least one rate hike by the end of 2026, which reduced expectations of a prolonged pause and increased the odds of a future rate hike.

Federal Reserve Keeps Interest Rates Unchanged in First Meeting Under Chair Kevin Warsh

No change dips to 76%1%

At Kevin Warsh's first FOMC meeting as Fed chair, the committee unanimously decided to maintain the federal funds rate target range at 3.50% to 3.75%. The statement highlighted elevated inflation due to supply shocks and geopolitical uncertainty, signaling a cautious approach with possible rate hikes later in the year but no immediate changes.

Federal Reserve holds interest rates steady at 3.5%-3.75% in Kevin Warsh's first FOMC meeting

25 bps increase jumps to 16%12%

The Federal Open Market Committee unanimously decided to maintain the federal funds rate target range at 3.5% to 3.75%, citing solid economic activity but elevated inflation partly due to supply shocks. The statement removed forward guidance bias toward cuts and introduced a more hawkish tone, signaling possible rate hikes later in the year, which shifted market expectations toward a 25 bps increase in July.

Fed's updated economic projections show majority expect rate hike by end of 2026

25 bps increase jumps to 16%12%

The FOMC's Summary of Economic Projections revealed that nine of 19 policymakers anticipate at least one rate hike by the end of 2026, a shift from prior expectations of cuts. Inflation forecasts were raised, and the median funds rate projection for year-end 2026 increased to 3.8%, reinforcing market pricing for a 25 bps increase in the July meeting.

New Fed Chair Kevin Warsh begins tenure with steady rates and hawkish outlook

25 bps increase dips to 25%2%

Kevin Warsh's first meeting as Fed Chair resulted in a unanimous decision to hold rates steady but with a hawkish tone in the statement and projections, indicating a shift from prior easing bias to potential rate hikes later in 2026.

Fed dot plot flips to signal rate hike in 2026

25 bps increase surges to 27%21%

The June 2026 Fed dot plot showed a median year-end fed funds rate projection of 3.8%, up from 3.4% in March, indicating a shift from expected cuts to hikes. This hawkish projection influenced market pricing toward a 25 bps increase in July.

Fed holds rates steady in Kevin Warsh's first meeting but signals future hikes

25 bps increase surges to 21%18%

The Federal Open Market Committee unanimously voted to maintain the federal funds rate at 3.50%-3.75%. However, the Fed removed its previous easing bias from the policy statement and released updated projections showing that nearly half of the officials anticipate a rate hike by the end of 2026.

Fed Holds Rates Steady and Signals Hawkish Shift in Dot Plot Projections

25 bps increase jumps to 17%14%

In Kevin Warsh's first meeting as Fed Chair, the FOMC unanimously voted to maintain the federal funds rate at 3.50%-3.75%. However, the updated dot plot revealed a hawkish pivot, with nine of 19 officials projecting a rate hike by the end of 2026, causing 'No change' odds to drop slightly as '25 bps increase' expectations surged.

Fed Chair Kevin Warsh removes easing bias and slashes forward guidance in new statement

No change plunges to 79%15%

The FOMC's post-meeting statement was significantly shortened, completely removing the previous easing bias and forward guidance, signaling a return to a simpler format and a higher-for-longer rate path.

Fed holds rates steady at 3.5%-3.75% in first meeting under Chair Kevin Warsh

25 bps increase jumps to 20%14%

The Federal Open Market Committee unanimously voted to keep the federal funds rate unchanged at 3.5%-3.75%, removing prior language suggesting easing and signaling possible rate hikes later in the year. This hawkish shift raised market expectations for a 25 bps increase in July.

June FOMC Summary of Economic Projections shows higher inflation outlook and rate hike expectations

25 bps increase jumps to 20%14%

The Fed's June Summary of Economic Projections raised the median PCE inflation forecast for 2026 to 3.6% and showed nine officials favoring at least one rate hike by year-end, reinforcing the market's shift toward pricing a 25 bps increase in July.

Fed Chair Kevin Warsh Abandons Forward Guidance and Revamps Policy Statement

No change plunges to 72%21%

In his debut meeting, Chairman Warsh shortened the FOMC statement and eliminated forward guidance, removing the language anchors that market participants relied on to predict future rate cuts.

Fed Chair Warsh Expected to Withhold Dot from Central Bank's Interest Rate Outlook

No change dips to 92%3%

Reports emerged that newly sworn-in Fed Chair Kevin Warsh would withhold his individual interest-rate projection from the Fed's quarterly dot plot. This move signaled his skepticism toward forward guidance and introduced strategic ambiguity ahead of his first FOMC meeting.

FOMC Meeting Holds Federal Funds Rate Steady at 3.50%-3.75%

No change jumps to 79%5%

At the June 16-17 FOMC meeting, the Federal Reserve under new Chair Kevin Warsh voted unanimously to keep the federal funds rate unchanged at 3.50%-3.75%. The statement emphasized solid economic growth and elevated inflation, dropping any easing bias and signaling a potential 25 bps hike later in 2026, shifting market expectations toward a hawkish stance.

United States and Iran Reach Preliminary Peace Agreement to Reopen Strait of Hormuz

No change rises to 94%1%

The U.S. and Iran agreed on a preliminary framework to end their conflict and reopen the Strait of Hormuz, raising hopes of easing the energy-driven inflation pressures that have kept interest rates high.

US and Iran Announce Interim Peace Agreement to Reopen Strait of Hormuz

The announcement of a preliminary peace deal sparked a sharp drop in global oil prices, easing some immediate inflation fears but setting the stage for a highly anticipated Federal Reserve meeting under new leadership.

US Consumer Inflation Jumps to 4.2% in May on Rising Energy Costs

No change rises to 93%3%

U.S. consumer prices rose 4.2% year-on-year in May, marking the fastest pace of inflation in three years due to energy price spikes from the war in Iran. The hot print solidified expectations that the Fed would keep interest rates elevated and potentially hike them later in the year.

US Inflation Reaches 4.2% in May, Highest Since April 2023

25 bps increase surges to 25%19%

The Bureau of Labor Statistics reported that headline consumer price inflation rose to 4.2% year-over-year in May, driven by a massive surge in energy costs. This hotter-than-expected print forced markets to completely price out rate cuts for 2026 and begin pricing in potential rate hikes.

US May CPI inflation rises 4.2% year-over-year, matching expectations

The Bureau of Labor Statistics released the Consumer Price Index for May 2026, showing a 4.2% year-over-year increase. This persistent inflation, driven in part by energy price shocks, kept pressure on the Federal Reserve ahead of its June policy meeting.

May 2026 CPI report shows 4.2% annual inflation amid energy price surge

25 bps increase jumps to 16%11%

The U.S. Bureau of Labor Statistics reported a 4.2% year-over-year increase in the Consumer Price Index for May 2026, driven largely by a 23.5% surge in energy costs linked to Middle East tensions. This inflation data heightened market concerns about persistent inflation, influencing expectations for Federal Reserve tightening.

May Consumer Price Index shows persistent inflation pressures

25 bps increase surges to 27%21%

The May 2026 CPI report showed headline inflation rising at 4.17% year-over-year and core CPI increasing to 2.9%, a new high since September 2025. This data reinforced concerns about persistent inflation, supporting expectations for future Fed rate hikes.

Rising inflation and Fed officials signal rate hikes back on the table

25 bps increase surges to 18%15%

In early June, Federal Reserve officials indicated that inflation was taking longer to return to target levels, reversing earlier expectations of rate cuts. This increased market expectations for at least one 25 bps rate hike by year-end, raising the probability of a July increase.

US inflation climbs to 4.2% in May, highest in three years

25 bps increase dips to 4%2%

The Consumer Price Index rose 0.5% in May, pushing annual inflation to 4.2% due to an energy price surge, increasing pressure on the Fed to consider tightening policy.

May 2026 CPI Inflation Report Shows 4.2% Year-Over-Year Increase

No change drops to 74%8%

The May CPI report released on June 10 showed headline inflation at 4.2%, up from 3.8% in April, driven by energy price surges amid Middle East tensions. This higher-than-expected inflation reinforced market expectations that the Fed would hold rates steady but remain hawkish on future hikes.

Jerome Powell signals likely pause in rate hikes at June meeting

No change rises to 94%1%

Fed Chair Jerome Powell indicated that the Federal Reserve would likely forgo an interest rate increase at the June meeting, citing that the current rate level was sufficiently restrictive to slow growth and inflation. This reassured markets about a pause, increasing the probability of no change in July.

Economists overwhelmingly expect Fed to hold rates steady through 2026

No change rises to 93%3%

A Reuters poll showed that 72 of 102 economists forecast the Fed would keep rates in the current range for the rest of 2026, reflecting persistent inflation and strong labor market data. This consensus supported the market's high probability pricing for no change at the July meeting.

Fed Signals Shift at June Meeting, Markets Price in Possible 2026 Rate Hike

No change dips to 93%2%

With inflation remaining elevated and labor markets strong, the Fed's June meeting signaled a potential end to the easing bias, increasing market expectations for no change in July but possible hikes later in 2026.

May Nonfarm Payrolls Report Shows Strong Job Growth

The U.S. economy added 172,000 jobs in May 2026, well above forecasts, with the unemployment rate steady at 4.3%. This strong labor market data reduced expectations for near-term rate cuts and supported a hawkish outlook for the Fed.

US Economy Adds 172,000 Jobs in May, Far Exceeding Forecasts

No change jumps to 94%5%

The U.S. labor market showed unexpected resilience as nonfarm payrolls surged by 172,000 in May, far outpacing the consensus estimate of 80,000-85,000. This strong report reduced expectations for near-term rate cuts and supported a hawkish outlook ahead of the June FOMC meeting.

US Adds 172,000 Jobs in May, Surpassing Expectations

No change rises to 95%2%

The strong jobs report indicated a resilient labor market, which supports the Fed's cautious stance on rate cuts and bolsters the case for maintaining current rates at the upcoming July meeting.

Federal Reserve Beige Book Highlights Inflation Pressures from Middle East Conflict

No change drops to 82%11%

The June 3 Beige Book reported moderate to strong price increases across the U.S., driven by rising fuel costs linked to the Middle East conflict. This report underscored persistent inflationary pressures, influencing market expectations for the Fed to maintain or potentially raise rates.

Fed Officials Signal Possible Future Rate Hikes if Inflation Persists

Fed officials, including Vice Chair Michelle Bowman, indicated readiness to raise rates if inflation remains elevated due to the Middle East war's impact. This reinforced market caution but did not materially reduce the dominant 'No change' expectation for July.

Former Fed Chair Powell delivers final inflation reality check amid rising prices

No change dips to 93%1%

In his final FOMC meeting remarks, Jerome Powell emphasized that inflation remains elevated and is moving in the wrong direction, reinforcing the Fed's cautious approach and supporting market pricing for no rate change in July.

Kevin Warsh sworn in as 17th Chairman of the Federal Reserve

Kevin Warsh officially took the oath of office, assuming leadership of the central bank ahead of the critical June and July policy meetings.

Fed minutes reveal growing hawkish sentiment amid inflation concerns

Minutes from the May period showed increasing concern among Fed officials about inflation risks fueled by the Iran war, with more policymakers open to the possibility of raising rates. This hawkish shift contributed to a slight increase in the market's probability of a rate hike but did not significantly alter the dominant expectation of no change by July.

Fed Minutes Reveal Growing Hawkish Sentiment Ahead of July Meeting

25 bps increase rises to 6%3%

The May release of FOMC minutes showed increased concern among policymakers about inflation risks, with four dissenters favoring a rate hike. This indicated a more hawkish tilt within the Fed, briefly supporting some market consideration of a 25 bps increase, though the overall market still favored no change.

Fed Minutes Show Officials See Rate Hike Ahead if Inflation Stays Elevated

Minutes from the April meeting revealed that many Fed officials favored removing easing bias language and indicated potential rate hikes if inflation remains high, reinforcing market expectations for no cuts and possible future increases.

Fed Officials Signal Longer Pause and Delayed Rate Cuts

No change rises to 93%2%

Fed minutes indicated that officials generally judged the rate pause would extend longer than previously thought, with rate cuts expected later in 2026 or early 2027, reflecting caution amid inflation and geopolitical uncertainties.

Fed Officials Signal Potential Rate Hike if Inflation Persists, Minutes Show

No change rises to 93%2%

The FOMC minutes released in May indicated a split among policymakers, with some favoring rate hikes if inflation does not subside, reflecting a more hawkish stance under incoming Chair Kevin Warsh. This reduced market expectations for rate cuts in 2026.

Fed Minutes Show Increased Hawkishness with Four Dissenters Favoring Rate Hikes

No change rises to 93%3%

The May release of FOMC minutes revealed four dissenting policymakers advocating for rate hikes due to inflation concerns exacerbated by the Middle East conflict. This indicated a more hawkish Fed stance, but the market still favored no change for the July meeting, keeping the 'No change' price high.

Fed Vice Chair Bowman Signals Three Rate Cuts Before End of 2026

No change rises to 92%2%

Michelle Bowman indicated expectations for three rate cuts later in 2026, suggesting a dovish tilt despite current steady rates. This statement contributed to market confidence that no immediate rate hikes would occur in July, supporting the 'No change' outcome.

Yardeni Says Fed Will Need July Rate Hike to Appease Bond Vigilantes

25 bps increase rises to 6%1%

On May 18, analyst Yardeni suggested the Fed might have to raise rates in July to satisfy bond market pressures, introducing some speculation about a possible 25 bps increase. However, this view did not gain significant market traction, as the 'No change' outcome continued to dominate.

Jerome Powell steps down as Fed Chair amid persistent inflation and economic challenges

No change rises to 93%1%

Jerome Powell concluded his tenure as Fed Chair, leaving a legacy marked by persistent inflation above target and cautious monetary policy. His departure added some uncertainty but did not shift market expectations for the July meeting, which remained focused on maintaining current rates.

Senate confirms Kevin Warsh as Chairman of the Federal Reserve

The U.S. Senate voted 54-45 to confirm Kevin Warsh as the next Fed Chair, succeeding Jerome Powell and signaling a potential shift in monetary policy communication.

Kevin Warsh confirmed as new Federal Reserve Chair

Kevin Warsh was confirmed as the new Fed Chair, marking a leadership change expected to influence monetary policy direction. Markets anticipated a potential shift away from the easing bias, increasing speculation about possible rate hikes later in 2026, though immediate rate changes were not expected.

April 2026 CPI inflation rises to 3.8%, highest since May 2023, driven by energy prices

No change rises to 92%2%

The Consumer Price Index rose 3.8% year-over-year in April 2026, up from 3.3% in March, with energy prices surging due to the Iran war. This elevated inflation reading kept pressure on the Fed to maintain rates, reducing market expectations for rate cuts or hikes in July.

April CPI inflation rises 3.8%, highest since May 2023, driven by energy prices

No change rises to 94%3%

The April CPI report showed inflation at 3.8% year-over-year, the highest in nearly three years, largely due to surging gasoline and energy prices from the ongoing Iran conflict. This heightened inflationary pressure diminished market expectations for rate cuts in July.

US CPI Inflation Surges to 3.8% in April, Reaching Highest Level Since 2023

25 bps decrease dips to 4%2%

Driven by surging energy costs from the Iran war, annual inflation rose to 3.8%, further dampening any remaining expectations for near-term rate cuts.

April CPI Shows 3.8% Year‑Over‑Year Inflation Spike

No change rises to 93%1%

The CPI for April was released showing a 3.8 % annual rise – the highest since 2023 – driven by soaring energy prices. The jump reinforced concerns that inflation could stay elevated, prompting traders to back a continued hold rather than a cut, lifting “No change” from 92 % to 93 % on May 13.

April CPI inflation rises to 3.8%, highest since May 2023, driven by energy costs

The Consumer Price Index for April 2026 showed inflation rising to 3.8% year-over-year, the highest since May 2023, fueled by continued high energy prices due to the ongoing Iran war. This reinforced market expectations that the Fed would maintain a cautious stance on rate cuts in the near term.

BofA and Goldman Sachs Push Back Fed Rate-Cut Expectations

No change rises to 89%4%

On May 11, major financial institutions revised their forecasts, expecting the Fed to hold rates steady through 2026 due to inflation risks and strong labor market data. This dampened market expectations for rate decreases in July, reducing probabilities for rate cuts.

April 2026 jobs report shows stronger-than-expected job gains, supporting Fed rate hold

No change rises to 90%2%

The U.S. Bureau of Labor Statistics reported an increase of 115,000 jobs in April 2026, exceeding expectations and indicating labor market stability. This reinforced the view that the Fed would maintain current rates, further boosting the 'No change' outcome probability.

US Nonfarm Payrolls Rise by 115,000 in April, Beating Muted Forecasts

No change rises to 91%1%

The April jobs report showed steady labor market growth despite Middle East conflict pressures, reinforcing expectations that the Fed would keep rates steady for some time.

April jobs report shows 115,000 payroll increase, reinforcing Fed's hold stance

No change rises to 91%2%

The April 2026 employment report revealed stronger-than-expected job gains of 115,000, supporting the Fed's decision to maintain rates as labor market conditions remained stable. This data reduced market expectations for rate cuts in the near term.

FOMC Statement Highlights Inflation and Employment Outlook

No change jumps to 82%8%

The FOMC statement emphasized solid economic activity, low job gains, and elevated inflation, reinforcing a cautious approach to rate changes. The statement's tone supported the market's growing belief in a steady rate policy through July.

Fed keeps rates steady at 3.50%-3.75% with divided vote

No change rises to 84%4%

In what was likely Chair Jerome Powell's final meeting, the FOMC voted to hold rates steady amid persistent inflation and a softening labor market. The decision was split, with some dissenters preferring a rate cut, but the committee maintained the current range, reinforcing market pricing for no change through 2026.

Fed Unanimously Maintains Interest Rate on Reserve Balances

No change jumps to 88%8%

The Board of Governors voted unanimously to maintain the interest rate paid on reserve balances at 3.65%, consistent with the decision to keep the target federal funds rate unchanged, reinforcing the Fed's steady policy stance.

Fed Maintains Rates at 3.50%-3.75% with Notable Dissent

No change jumps to 88%8%

At the April FOMC meeting, the Fed kept rates steady but faced four dissenting votes, the most since 1992, reflecting increased debate about future hikes amid inflation concerns. The statement emphasized data dependency and uncertainty, supporting the market's growing conviction of no change in July.

Fed Maintains Interest Rates at April Meeting Despite Internal Dissent

No change jumps to 88%8%

At the April 28-29 meeting, the Federal Reserve voted to keep the federal funds rate unchanged at 3.50% to 3.75%, with some dissenting votes preferring a rate cut. The Fed highlighted ongoing inflation risks and geopolitical uncertainty but chose to maintain the current policy stance.

Fed Holds Rates Steady in April, Powell Delivers Farewell as Chair

No change jumps to 93%5%

The FOMC unanimously voted to maintain the federal funds rate at 3.50% to 3.75% during Jerome Powell's final meeting as chair. The decision reflected ongoing inflation risks and geopolitical uncertainties, reinforcing market confidence in the 'No change' outcome, which rose to over 90%.

Jerome Powell announces plan to remain on Fed Board after chair term ends

At the April meeting, Powell stated he would stay on as a Fed governor after his chair term ends in May, providing continuity amid economic uncertainty. This announcement reassured markets about policy stability, supporting the no change outcome.

Federal Reserve holds interest rates steady amid inflation and economic uncertainty

No change rises to 84%4%

At its April 28-29 meeting, the FOMC voted to keep the federal funds rate at 3.5%-3.75%, citing elevated inflation partly due to rising global energy prices and stable but low job gains. The decision was not unanimous, with four dissenters, but it confirmed the market's expectation of no rate change, pushing the 'No change' outcome price higher.

Fed holds rates steady amid highest dissent since 1992 in Powell's final meeting

No change rises to 93%4%

The Federal Open Market Committee voted 8-4 to keep the federal funds rate at 3.50%-3.75%, with four dissenters reflecting uncertainty about inflation and future rate moves amid the Iran war and elevated energy prices. Powell announced he would remain on the Board of Governors until the renovation investigation concludes, signaling continuity amid leadership transition.

Powell Says Inflation Remains Elevated, Fed Will Monitor Energy Risks

No change rises to 85%1%

Powell’s press conference after the April hold emphasized that inflation remains “elevated” and that the Fed will “continue to monitor” energy‑price risks. The dovish tone used to reassure markets kept the probability of any change near zero, contributing to the steady rise of the “No change” bracket.

Federal Reserve Holds Rates Steady in Powell's Final Meeting as Chair

No change rises to 88%3%

The Fed kept the benchmark interest rate unchanged at 3.5% to 3.75% amid persistent inflation and geopolitical tensions, marking the third consecutive hold in 2026.

Fed holds rates steady at 3.5%-3.75%, signals cautious outlook

At its April meeting, the FOMC again held rates steady, emphasizing the need to monitor inflation and labor market data closely. The statement reflected a balanced view, with some dissenters favoring a rate cut, but the majority supporting the hold, which kept market expectations for no change in July high.

FOMC maintains rates steady, signals delayed rate cuts

The April 28-29 FOMC meeting resulted in no change to the federal funds rate, with the Committee noting market expectations for little change in 2026 and pushing anticipated rate cuts later in the year. This contributed to sustained market confidence in the 'No change' outcome and diminished probabilities for rate decreases.

DOJ drops criminal investigation into Fed Chair Jerome Powell

No change jumps to 89%5%

The Department of Justice closed its criminal probe into Fed Chair Jerome Powell related to the Federal Reserve's renovation project, removing a major obstacle to Kevin Warsh's confirmation and reducing political uncertainty around Fed leadership and policy.

DOJ Drops Criminal Probe Into Fed Chair Jerome Powell

No change rises to 85%1%

The DOJ announced it was dropping the criminal investigation into Fed Chair Jerome Powell’s building‑renovation probe. The closure removed a political obstacle to Kevin Warsh’s confirmation, reinforcing market expectations that the Fed would remain on a hold‑policy path, nudging “No change” from 84 % to 85 % the next day.

Kevin Warsh testifies at Senate Banking Committee for Fed Chair confirmation

No change rises to 84%2%

Kevin Warsh, President Trump's nominee for Federal Reserve Chair, appeared before the Senate Banking Committee for his confirmation hearing. His nomination amid inflation and geopolitical uncertainty influenced market expectations about future Fed policy direction.

March CPI inflation rises 3.3% driven by energy price surge amid Iran war

No change rises to 81%3%

The March CPI report showed a 3.3% annual inflation increase, pushed by a 10.9% surge in energy costs due to the Iran conflict. This reinforced the Fed's cautious stance on rate changes, supporting market expectations of no rate hike in April.

March 2026 CPI inflation rises to 3.3% amid Iran war energy price surge

No change jumps to 81%6%

The U.S. Bureau of Labor Statistics reported a 3.3% year-over-year increase in CPI inflation for March 2026, up from 2.4% in February, driven by a 10.9% surge in energy costs due to the Iran conflict. This heightened inflation reinforced market expectations that the Fed would hold rates steady, supporting the 'No change' outcome.

March CPI inflation spikes to 3.3% driven by Iran war energy price surge

No change jumps to 82%5%

The U.S. Bureau of Labor Statistics reported a 3.3% year-over-year increase in CPI for March 2026, up from 2.4% in February, largely due to soaring gasoline and energy prices caused by the Iran war and Strait of Hormuz disruptions. This heightened inflation concerns and complicated the Fed's rate outlook.

March FOMC Minutes Reveal Deep Divide Over Geopolitical Inflation Risks

No change dips to 80%3%

The release of the March meeting minutes showed policymakers split on whether the conflict in Iran would entrench inflation or damage employment, reinforcing expectations of a prolonged pause.

Fed Minutes Reveal Growing Openness to Rate Hikes Amid Inflation Concerns

No change rises to 74%2%

Minutes from the March FOMC meeting showed an increasing number of policymakers considering future rate hikes to counter persistent inflation, especially due to inflationary impacts from the Middle East conflict. This hawkish tone caused some market uncertainty but did not significantly shift the dominant 'No change' expectation.

Fed Chair Powell Says Central Bank Can 'Wait and See' on War's Inflation Impact

No change jumps to 80%6%

Speaking at Harvard University, Fed Chair Jerome Powell emphasized a cautious, data-dependent approach, noting that the central bank can wait to see how the war in Iran affects inflation before adjusting rates.

Fed Chair Powell signals wait-and-see approach on rate hikes amid Iran war inflation

No change jumps to 77%9%

At a Harvard University speech, Powell stated the Fed would monitor the inflation impact of the Iran war and energy price shocks before adjusting rates, emphasizing the lagged effect of monetary policy and suggesting no immediate hikes. This reassured markets that the Fed would likely hold rates steady in the near term despite inflation risks.

Fed Chair Powell says inflation expectations remain grounded despite rising energy prices

No change dips to 76%1%

Jerome Powell stated that inflation expectations are stable despite recent energy price increases, indicating the Fed does not need to raise rates immediately. This reassured markets that the Fed would likely hold rates steady in upcoming meetings.

Fed Chair Powell signals no immediate rate hikes despite rising energy prices

No change jumps to 77%9%

Federal Reserve Chair Jerome Powell stated that inflation expectations remain grounded despite rising energy prices due to the Iran war, indicating the Fed does not need to raise interest rates immediately. This reassured markets and supported expectations of no rate increase in the near term, causing a rise in the 'No change' outcome price.

Market Pricing Shifts Toward No Change After March FOMC

No change jumps to 77%9%

Following the March FOMC meeting, market-implied probabilities for no change in July increased significantly, reflecting the Fed's cautious stance and balanced approach amid geopolitical risks and inflation uncertainty.