Middle East tensions keep central banks cautious on rate cuts amid inflation

Central banks are holding off on rate cuts as Middle East tensions keep inflation elevated. The probability of a Fed rate decrease by 50+ bps after the April meeting is low, with odds down 15% based on current market sentiment. The Fed’s April 2026 meeting decision reflects caution under inflationary pressure. With only two days left, traders are pricing in no substantial cuts. April 30 markets show limited activity, and expectations of a dramatic policy shift are minimal. The July 2026 market is more active. Odds of no rate change sit at 86% YES, up from 80% a week ago. This market saw a 36-point spike driven by $8,065 in actual trading volume, pointing to stronger confidence in a stable rate environment by July.

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