The Fed held rates at 3.5%-3.75% Wednesday as expected, but markets are repricing the entire policy path after the Iran conflict drove oil prices higher. The most dramatic move: traders now see just 29¢ odds of rates above 1.75% by April 2027, down from 82¢ — a massive 53-cent collapse. Fed officials penciled in one cut for 2026 while acknowledging the oil shock has complicated their inflation picture. The market is pricing in deeper cuts than policymakers project, betting that economic damage from sustained energy prices will eventually force the Fed's hand despite current hawkish rhetoric.