Elevated inflation pressures from higher energy prices amid the ongoing Middle East conflict, combined with a resilient labor market showing only modest job gains and stable unemployment near 4.3%, have driven trader consensus toward fewer or zero federal funds rate cuts in 2026. The Federal Reserve held its target range steady at 3.50%-3.75% after the April FOMC meeting amid an unusually divided 8-4 vote, with market pricing via CME FedWatch now implying over 70% odds of no change through year-end. Brokerage forecasts have shifted accordingly, with some projecting the first 25 basis point cut as late as December 2026 or into 2027. Key upcoming catalysts include the June 16-17 FOMC decision and the next CPI release, which could further shape the balance of risks between persistent price pressures and any softening in economic data.