U.S. consumer prices surged to 3.8%, the highest in over three years. The Federal Reserve now says inflationary pressures are no longer “transitory.”
Higher energy costs, driven by conflict involving Iran, are spilling into the broader economy. The Fed acknowledges geopolitical factors are creating persistent price shocks.
Markets now see a 31.5% chance of a Fed rate hike in 2026, down from 44% a week ago. The probability of a rate cut by June 2026 is just 1.7%.