The Federal Reserve held rates steady at 3.5%-3.75% at its January meeting, but markets are now pricing in a dramatically different path forward. Fed governor Stephen Miran expects 150 basis points of cuts this year, far beyond the median Fed member's estimate for one 25 basis point cut, yet markets are moving in the opposite direction.

April 2027 expectations show the sharpest reversal: odds of rates above 2.25% jumped 36¢ to 48¢, while expectations for cuts by January 2027 collapsed. Odds of rates above 3.25% by January 2027 fell 34¢ to just 6¢, while rates above 3.00% dropped 27¢ to 43¢. This hawkish repricing comes as fresh readings on consumer and wholesale inflation showed prices remain sticky, forcing traders to reconsider their aggressive dovish bets despite political pressure from President Trump for lower rates.