---
title: "2026 Rate Cut Odds Plunge to 0% as Inflation Fears Overwhelm"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/286809807.md"
description: "The odds of a 2026 interest rate cut have plummeted to 0% due to rising inflation fears, with long-term yields increasing. The likelihood of maintaining current rates is at 51.9%, while a single rate hike by year-end stands at 37.8%. The Consumer Price Index rose to 3.8% in April, the highest since 2023."
datetime: "2026-05-18T19:01:21.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/286809807.md)
  - [en](https://longbridge.com/en/news/286809807.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/286809807.md)
---

# 2026 Rate Cut Odds Plunge to 0% as Inflation Fears Overwhelm

Investors betting on a rate cut in 2026 may need to reevaluate their plans, as the odds of an interest rate cut by year-end on the CME FedWatch tool fell to 0% on Monday. The odds dropped from 0.6% on Friday, 3.7% a week ago, and 37.6% a month ago.

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The risk of elevated inflation has sent the odds tumbling. Rising oil and gas prices have spurred fears of higher prices, sending long-term yields higher in the process.

## **Rising Yields Point to Steady or Even Higher Rates**

Rising long-term yields can signal that the Fed will keep rates higher for longer or even hike them. A rate hike is now on the table, with odds of one hike by year-end at 37.8%. The odds of two hikes are at 9.3%, while three hikes are less likely at 1%. However, the most likely scenario at 51.9% is for the central bank to maintain rates.

Long-term yields also account for inflation expectations, as investors demand a higher return to offset a loss in purchasing power. In April, the Consumer Price Index (CPI) rose to 3.8%, marking its highest level since 2023.

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