Persistent inflation reacceleration, highlighted by the May 2026 CPI release showing a 0.5 percent month-over-month headline increase and core prices at 2.9 percent year-over-year, has shifted trader consensus toward a higher likelihood of Fed rate hikes later in 2026. The federal funds rate remains anchored in the 3.50–3.75 percent target range after the April decision, supported by a resilient labor market with unemployment near 4.3 percent and solid nonfarm payroll gains. Market-implied odds assign negligible probability to any move at the June 16–17 FOMC meeting, where updated projections from incoming Chair Kevin Warsh will be scrutinized, while futures now embed a modest chance of 25-basis-point hikes by September or October if price pressures persist. Upcoming labor data and Treasury yield movements will serve as key swing factors influencing the policy path.