Fed set to hold rates as markets price pause

The Federal Reserve is expected to hold interest rates steady at 3.75% at the April 29 FOMC meeting, with traders assigning a 99% probability to no change.

Data from the CME Group FedWatch tool shows near-unanimous expectations for a pause, with only a 1% chance of a rate hike and no pricing for a cut.

Prediction markets including Polymarket and Kalshi also signal a steady policy path, with high probabilities of no change through June and July.

Traders point to March inflation at 3.3% and unemployment at 4.3% as key reasons for the Fed’s cautious stance, suggesting no urgency to adjust rates.

Longer-term expectations remain anchored around limited easing, with markets pricing a high probability of zero or one rate cut for all of 2026.

Trading volumes across prediction platforms indicate strong conviction in this outlook, with tens of millions of dollars backing the no-change scenario.

Investors are now focused on upcoming inflation and jobs data, which could shift expectations if economic conditions change.