Markets Are Less Confident the Fed Will Cut Rates This Year

Inflation remains above the Fed's 2% target and Powell says there are too many factors set to hit inflation in the coming months to consider cutting interest rates right now.

After three Fed presidents said they disagreed with language in the April FOMC statement that indicated an easing bias for the Fed, markets are moving to price in lower odds of an interest-rate cut in 2026. Markets are now pricing in just a 1.