Market expectations show low odds of Fed cuts at the March meeting, despite strategists expecting one rate cut in 2026, yet prediction markets tell a more hawkish story. Bets on rates above 3% by April 2027 exploded from 6¢ to 77¢, while wagers on rates staying above 2.75% climbed 48 cents to 71¢. Fed officials are turning attention to inflation running at 2.9%, well above their 2.0% target, with some advocating for a "two-sided" approach that could include rate hikes. The dramatic reversal reflects growing concerns that wholesale prices climbed 3.5% year-over-year in November, with companies beginning to pass tariff-related costs to customers.