Quick Read – Bond traders and stock investors have abandoned expectations for Federal Reserve rate cuts in 2026; futures markets now show below 1% odds of a June rate cut and rising odds of a rate hike by January 2027. – The U.S. economy is displaying early signs of stagflation…
th inflation climbing to its highest level since 2023 while consumer confidence hits all-time lows and labor market cracks emerge, forcing the Fed to choose between tolerating higher inflation or accepting economic weakness and job losses. – The analyst who called NVIDIA in 2010 just named his top 10 AI stocks. Get them here FREE
For most of 2026, Wall Street treated Federal Reserve rate cuts as inevitable. The only debate was whether investors would get two cuts or three. Bond traders, stock investors, and mortgage borrowers all built their expectations around the idea that inflation was cooling enough for the Fed to ride to the rescue.
Now, that entire narrative is unraveling. Markets have moved from confidently pricing multiple rate cuts to hoping the Fed simply avoids raising rates again. And that shift says a lot about where the U.S. economy may be heading next — toward a painful period of stagflation where inflation stays elevated even as growth slows and unemployment rises.