Markets are suddenly pricing aggressive Fed tightening for early 2028, with odds of a >25 basis point hike jumping from 9¢ to 61¢. This reflects growing anxiety that inflation has been "running above our target for more than five years now" according to Cleveland Fed President Beth Hammack.

Gas prices averaged $4.12 a gallon nationwide Monday, up 80 cents from a month earlier due to Middle East conflicts. J.P. Morgan Global Research expects the Fed to hold rates steady for the rest of 2026, with the next move likely being a hike of 25 basis points in Q3 2027. But traders are now pricing even more aggressive action by 2028, suggesting persistent inflation could force the Fed's hand sooner than analysts expect.