Fed rate cut likelihood for June 2026 declines amid Williams’ inflation comments

## Market Snapshot

Fed rate cut by June 2026 meeting is currently priced at 3.6% YES, down from 4% 24 hours ago and 8% a week ago. The Fed decision for June and July meetings indicates a 2.4% YES probability for a rate cut, reflecting decreased expectations.

## Key Takeaways

– Williams’ comments on inflation stability and increased risks appear consistent with decreased likelihood of near-term rate cuts. – Market pricing suggests a reduced probability of the Federal Reserve cutting rates by June or July 2026. – Observations from Williams’ statements could indicate fewer rate cuts in 2026, aligning with the current market sentiment.

## Article Body

New York Fed President John Williams stated that he anticipates the jobless rate to remain around 4.25% to 4.50%, with inflation likely to be stable at 3% this year. Williams noted that tariffs and energy are significant inflation drivers, but underlying inflation remains mostly stable. He emphasized that risks to the Fed’s dual mandate have increased, mentioning notable supply chain disruptions and the unusual economic circumstances. Williams’ outlook reflects ongoing geopolitical pressures, particularly from the conflict involving Iran and Western-aligned forces, which have disrupted oil supplies and impacted inflation.

## Market Interpretation

The market interpretation of Williams’ remarks suggests a decreased likelihood of a rate cut by the Federal Reserve in the near term. The impact is assessed as moderate, with market pricing reflecting a reduced expectation for interest rate reductions in June and July 2026. Observations from Williams’ statements are consistent with scenarios where fewer cuts occur throughout the year.

## What to Watch

Watch upcoming employment and inflation reports for indicators that could influence the Fed’s decisions. Key actors to watch include Federal Reserve Chair Jerome Powell and the Federal Open Market Committee. Developments in the geopolitical landscape, particularly regarding the Iran conflict, could also impact future monetary policy expectations.

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Fed decision june and july bearish

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