Markets Bet on a Hold, But a Surprise Hike Isn't Off the Table from the Feddy Reserve

The Main Points

• The Fed is widely expected to leave its benchmark rate unchanged at 3.50%-3.75% for a fifth straight meeting.
• CME FedWatch pricing shows roughly a 64% chance of a hold versus about a 36% chance of a quarter-point hike.
• Chair Kevin Warsh has emphasized inflation risk over growth concerns, with the Fed's 2026 inflation projection revised up to 3.6%.
• Renewed tension between the U.S. and Iran, along with elevated oil prices, has added uncertainty to the policy outlook.
• The decision and press conference are scheduled for 2:00 p.m. and 2:30 p.m. ET Wednesday.