Traders are dramatically repricing Federal Reserve policy expectations for late 2027 and early 2028. The January 2028 'Hike >25bps' market collapsed from 61¢ to 17¢, while smaller hikes gained favor — the 25bps hike option jumped to 22¢ from just 1¢. The December 2027 markets tell a similar story, with 'Fed maintains rate' surging to 54¢ from 24¢ as cut expectations fade. Recent market pricing shows zero rate movements expected for 2026 and only one 25 basis point cut in December 2027, a stark shift from earlier expectations. Markets are pricing in no Fed changes for the rest of this year and well into 2027 as inflation proves stickier than anticipated. This coordinated move across multiple Fed markets suggests traders are abandoning hopes for aggressive easing and positioning for a prolonged period of elevated rates — a fundamental shift in monetary policy expectations that reflects growing concerns about persistent price pressures.