The Federal Open Market Committee (FOC) is expected to hold its benchmark interest rate at 3.50% to 3.75% in 2026, almost four quarters later than what was expected at the start of this year. Economists at BNP Paribas predict that the Fed will remain on hold into 2027, but there is a growing tail risk that policymakers could consider raising rates as soon as June if the Strait of Hormuz stays closed and U.S. labor data remains resilient. However, Eric Diton, president & managing director at The Wealth Alliance, suggests that while the Fed remains committed to bringing inflation back to its 2% goal, it must balance this with a labor market where jobs added in the past three years have been disproportionate from education and healthcare. The March unemployment rate dropped to 4.3% in March from 4.4% in February, and nonfarm payrolls added 178,000 jobs to significantly exceed market expectations. The Fed's preferred inflation gauge, the Fed’s preferred inflation rate at 2.85%, rose to 2%.