The war in Iran has sent energy prices soaring, stoking inflation fears that could undercut President Donald Trump’s hope of Fed rate cuts this year.
The Atlanta Federal Reserve Bank’s Market Probability Tracker now positions the odds of a rate hike as more likely than the odds of a rate cut within the next three months. The tracker—a tool that estimates the market-implied probabilities of various ranges for the three-month average Fed funds rate—reveals the probability of a rate cut within a three-month window has fallen from a high of about 60% in early February, down to about a 16% chance as of Tuesday. The probability of a rate hike, on the other hand, has risen steadily since the start of the month, up to about 15% from single digits, though down slightly from a high of about 25% last week.
