Hotter-than-expected inflation readings, including March 2026 CPI at 3.3% year-over-year and subsequent April data, combined with a resilient labor market showing steady 4.3% unemployment and solid wage growth, have driven market-implied odds sharply against near-term Federal Reserve rate cuts. The FOMC held the federal funds target range steady at 3.50%-3.75% through its April 28-29 meeting amid dissent and highlighted risks from Middle East energy price pressures. Traders now price virtually no probability of a cut before late 2026 or into 2027, contrasting earlier expectations for one or two reductions this year. Key upcoming catalysts include the May CPI release, nonfarm payrolls, and the June 17-18 FOMC meeting with an updated dot plot.