Fed funds rate markets are repricing aggressively lower, with April 2027 odds above 3.00% falling from 80¢ to 47¢ while odds above 2.25% jumped from 36¢ to 62¢. The market sees low odds of the Fed choosing to cut at its March meeting, but strategists still expect one rate cut in 2026. Meanwhile, inflation expectations are climbing sharply — the market now prices 50¢ odds of inflation hitting at least 4% this year, up from 37¢. Some economists believe it's more likely that inflation will surprise to the upside, potentially exceeding 4 percent by the end of 2026. Fed governor Stephen Miran said he expects 150 basis points of rate cuts this year, suggesting the central bank may be more dovish than markets initially expected despite persistent inflation concerns.