Federal Reserve Expected to Hold Rates Steady at April Meeting as Inflation Concerns Persist
The Federal Reserve is widely expected to keep interest rates unchanged at 3.5%-3.75% when it meets April 28-29, with markets showing a 99.5% probability of no change. Energy prices from the Middle East conflict and persistent inflation above the Fed's target are tempering any rate-cut expectations.
Record Certainty of Rate Hold
Markets expect the Federal Reserve to hold interest rates steady at the April meeting, with CME FedWatch showing near certainty of no change, with a 99.5% chance no change. That's the highest percentage ever seen and yet is understandable with current world events.
Economic Backdrop
The Fed left the federal funds rate steady at the 3.5%–3.75% target range for a 2nd consecutive meeting in March 2026, in line with expectations, with policymakers noting that economic activity has been expanding at a solid pace, job gains have remained low while inflation remains somewhat elevated.
Limited Rate Cut Prospects
Despite the economic risks posed by the Middle East conflict, J.P. Morgan Global Research expects the Fed to remain on hold at its next meeting on April 28–29 and will then likely continue holding rates steady for the rest of 2026, before hiking 25 basis points in the third quarter of 2027. Fed officials have been preaching caution about the impact of oil spikes, inflation and tariffs on the U.S. economy since the conflict began at the end of February, tossing aside previous rate-cut forecasts for 2026.