The S&P 500 (SPX) opened Wednesday in the red ahead of the Fed interest rate decision at 2 p.m. Eastern Time today.
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Trade QQQ with leverageThe central bank is virtually guaranteed to hold rates steady with a 100% probability, according to the CME FedWatch tool. The U.S.-Iran war has raised the risk of sticky inflation and has also added an element of uncertainty to the economy.
CPI Inflation Posts Largest Gain Since 2022
In March, the Consumer Price Index (CPI) increased by 0.9%, registering the largest monthly gain since June 2022. Within the index, gas prices surged 21.2%, accounting for nearly three-quarters of the monthly increase.
“There’s still uncertainty about how this war is going to be resolved, and oil prices have been volatile,” said former Cleveland Federal Reserve president Loretta Mester.
By year-end, the most likely scenario with an 89.7% probability is for the Fed to maintain rates. The odds of a single rate cut sit at a slim 8.9%, signaling the risk of ongoing geopolitical tensions and rising prices.