The Federal Reserve (Fed Chair Jerome Powell) has stated that raising interest rates now could be the wrong medicine for the economy, which is already facing a softening labor backdrop and elevated recession concerns. Investors are now expecting the Fed to maintain benchmark rates steady or potentially cut them later in the year. This comes after import prices rose more than expected in February, and the OECD raised its U.S. inflation forecast to 4.2% for 2026. Futures prices indicated a 2.1% chance of a rate hike by year-end, despite concerns about the impact on consumer prices. Policymakers are concerned about the immediate impact of energy-driven inflation, rather than the risks that higher prices could sap consumer demand and hiring.