A coordinated shift across Fed rate markets reveals traders abandoning dovish expectations and pricing in a more aggressive monetary policy stance. The odds of Fed funds above 3% by January 2027 jumped from 21¢ to 68¢ — a 47-cent surge that mirrors similar moves across the rate curve. "We see the Fed holding the target range for the funds rate steady at 3.5-3.75% for the rest of the year." Thereafter, the Fed is projected to hike rates by 25 bp in the third quarter of 2027, bringing the upper band for the policy rate back up to 4%. Others argued that it may be prudent to hold the policy rate steady for some time and some even raised the possibility that rate increases could become necessary if inflation remains persistently above target. The synchronized movements across multiple rate thresholds — with the 2.75% level hitting 89¢ and even the 3.50% threshold reaching 54¢ — suggest traders are positioning for a fundamentally more hawkish Fed than previously expected. Cost pressures due to tariffs were a consistent theme across all Districts. Several contacts that initially absorbed tariff-related costs were beginning to pass them on to customers as pre-tariff inventories became depleted or as pressures to preserve margins grew more acute.