Fed Maintains Rates Unchanged in June with 97.7% Probability

Summary

As of May 12, 2026, CME FedWatch data shows a 97.7% probability that the Federal Reserve will maintain interest rates at 3.5%-3.75% in June [Golden Finance]. This follows an April meeting where the Fed held steady despite a highly divided 8-4 vote—the most contentious since 1992—driven by concerns over $100+ oil prices and 3.3% CPI inflation [Sina Finance+ 3].

Impact Analysis

The market has basically thrown in the towel on a June cut, with probabilities now hitting a near-certain 97.7% [Golden Finance]. This isn’t just a standard pause; it’s a defensive crouch. The Fed is grappling with oil prices over $100 and a messy leadership transition from Powell to Kevin Warsh [Reuters+ 2]. The 8-4 split in the last vote suggests deep internal friction over whether they’re behind the curve on inflation [Sina Finance+ 2]. While some analysts are still hoping for a September move, the reality is that geopolitical risks and energy costs are making the ‘higher-for-longer’ narrative much stickier [FX678+ 2]. In fact, some heavyweights like JPMorgan are now floating the idea of no changes until 2027 [中金在线-财经]. Bottom line: The market is misreading the ‘pause’ as a temporary wait—it’s actually a regime shift. I’d expect continued upward pressure on U.S. bond yields and a tough environment for high-multiple growth stocks as the discount rate stays anchored at these levels.