As we shared during our 2026 Annual Market Report presentations, we expected the Federal Reserve to hold steady on interest rates for the foreseeable future. That view was firmly reinforced following the Fed’s meeting on Wednesday, March 18th, where futures market pricing left little doubt: the current overnight rate is likely here to stay.
The futures market—where investors express their convictions with dollars rather than words—currently points to the Fed maintaining the existing Federal Funds Rate all the way through the April 28th, 2027 meeting. This rate directly influences money market yields and margin borrowing costs, making it a meaningful benchmark for investors across the board.
That said, the picture isn’t entirely static. While a prolonged pause appears most likely, there remains a meaningful and asymmetrical probability that rates could move lower before the end of 2026. Specifically, futures pricing reflects a measurable chance of cuts of 25 or even 50 basis points by year end, while the probability of a rate increase is, by contrast, nearly zero. The Fed’s “dot plot,” which captures where individual members see rates heading, doesn’t yet reflect a clear consensus, but it does leave the door open to a cut later this year.
One of the key variables to watch will be energy prices. History shows a strong correlation between oil price movements and future inflation, and with ongoing volatility in the region as the situation in Iran continues to develop, energy markets will remain an important signal. We believe futures pricing is among the best real-time tools available for tracking how these dynamics are evolving and we will continue monitoring them closely on your behalf.
As always, we’ll keep you informed as the landscape shifts. For those who want to explore the data directly, the CME FedWatch Tool offers an up-to-date view of rate expectations as priced by the market.
This post is provided for informational purposes only. Specific investments may not be suitable for all investors and no offer or recommendation of any investment or investing strategy is intended or implied by your choosing to read this post. This material is not intended to be relied upon as a forecast or investment advice regarding a particular investment or the markets in general, nor is it intended to predict or depict the performance of any investment. The third-party information in this post is from sources we believe to be reliable, but BIP Wealth cannot guarantee its accuracy.
