The Fed’s April 2026 Beige Book describes slight to modest growth, with energy costs surging due to the Iran War. The likelihood of the Fed following a Cut–Pause–Pause pattern by April is 0%.
Market reaction
The Beige Book’s references to economic uncertainty and rising energy costs have pushed traders to reassess rate decision expectations. The Fed Decisions from January to April market shows odds decreasing for rate cuts, driven by inflationary pressures. With only 14 days until the April decision, the market is largely frozen, waiting on further Fed communications.
The Federal Funds Rate Predictions for End of 2026 market could shift toward higher odds for an elevated rate by year-end, driven by the same inflation concerns. Whether the upper bound rate reaches 4.25% by December 31 is unclear, but the broader economic picture points toward a hawkish stance.
Why it matters
The Beige Book signals the Fed’s likely hesitance to cut rates while energy prices remain elevated from the Iran War. At current odds, positioning around the Fed maintaining or increasing rates may offer an edge, given that inflationary pressures from the conflict show no signs of easing.
What to watch
Statements from Fed Chair Jerome Powell and other FOMC members ahead of the April decision. Their comments will directly shape how these markets move. Any unexpected geopolitical developments that further affect energy prices could also shift rate expectations quickly.
API access
