Persistent inflation pressures, fueled by elevated energy prices from the ongoing Middle East conflict, and a resilient labor market have driven market-implied odds sharply lower for any Federal Reserve rate cut in 2026. The FOMC held the federal funds target range steady at 3.50%-3.75% following its April 28-29 meeting, with March CPI rising to 3.3% and core PCE at 3.2%. CME FedWatch futures now price a roughly 71% probability of no change through year-end, while major brokerages including BofA and Goldman Sachs have shifted first-cut forecasts to late 2026 or 2027. Key upcoming catalysts include the June 17-18 FOMC meeting and fresh CPI and employment data releases that could further shape expectations for monetary policy easing.