Fed Seen Holding Rates—But Hike Isn’t Off the Table

With inflation cooling only modestly and oil prices rising on Middle East tensions, the Federal Reserve is expected to hold rates at its upcoming meeting, though a 25-basis-point hike remains possible this year. Futures assign roughly a 37% chance of a move, reflecting a split among officials: some, like Loretta Mester and Lorie Logan, favor holding unless inflation proves stickier, while others including Kevin Warsh signal a potential move if inflation stays above target. The decision will hinge on inflation trends versus energy-cost volatility and how trading markets price in the risk of higher rates.