---
title: "Rate Hike Odds Surge as Swelling Inflation Crushes Rate Cut Hopes"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/286124418.md"
description: "The odds of the Federal Reserve raising interest rates have surged following the release of the Consumer Price Index (CPI) for April, which showed a 3.8% inflation rate, the highest since 2023. The likelihood of maintaining rates is now at 63%, while the chances of a rate hike have increased significantly, with one hike now at 29.7% and two hikes at 4.3%. Conversely, the probability of a rate cut has decreased to 2.9%."
datetime: "2026-05-12T15:06:20.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/286124418.md)
  - [en](https://longbridge.com/en/news/286124418.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/286124418.md)
---

# Rate Hike Odds Surge as Swelling Inflation Crushes Rate Cut Hopes

In a pivot from the beginning of the year, the most likely outcome by year-end is for the Fed to either hold interest rates steady or raise them, according to the CME FedWatch tool. Rate hike odds surged higher after the Bureau of Labor Statistics (BLS) published the Consumer Price Index (CPI) for April this morning.

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For the 12 months ended April, CPI inflation rose 3.8%, marking the fastest pace since 2023 and above expectations of 3.7%. It rose 0.6% on a monthly basis, in line with the estimate. Higher energy prices were responsible for 40% of the monthly gain.

## **Rate Hike Bets Build As Cut Expectations Fade**

By the end of the year, the odds of the Fed maintaining rates are at 63%, down from 72.8% a day ago. However, the decrease is attributed to higher odds of rate hikes. The odds of one rate hike rose to 29.7% from 21.5%, while the odds of two hikes more than doubled to 4.3% from 2%.

Meanwhile, a rate cut scenario is becoming less and less probable, with the odds of one cut sinking to 2.9% from 3.7%.

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