The Fed held rates steady at 3.5%-3.75% with just one cut projected for this year, while inflation surged to 3.3% driven by energy price spikes. Traders crushed rate cut expectations across the board - odds of rates above 2.25% by April 2027 plummeted 61¢ to 33¢, while chances of rates above 3.00% fell 38¢ to 19¢. JP Morgan expects the Fed to remain on hold through 2026 before hiking 25 basis points in Q3 2027, reflecting market concerns that persistent energy-driven inflation could force a more hawkish stance than previously anticipated.