Recent inflation surges and heightened geopolitical risks from the Iran conflict have shifted trader focus toward the potential for a Federal Reserve rate hike, with fed funds futures now assigning over 50% probability to an increase by December 2026. At its April 29 meeting, the FOMC voted to hold the target range steady at 3.5% to 3.75%, though four dissents highlighted growing divisions over inflation risks versus labor market cooling. This marks a notable departure from earlier expectations of further easing, as sticky price pressures and solid economic activity have prompted markets to price in a more hawkish path. The next key catalyst arrives at the June 16-17 FOMC meeting, where updated dot plot projections and any signals on the balance of risks could refine the implied rate trajectory.