30% chance of interest rate hike vs. two rate cut expectations, which does the market believe?

Coin World News reports that market participants expect little change in the Federal Funds target rate range this year. The Federal Reserve meeting minutes show that market operations officials indicated that market-implied expectations still suggest that the probability of a rate hike in the first quarter of 2027, as implied by option prices, is about 30%. In a survey of open market operations, the median path continues to show two 25 basis point rate cuts over the next year, but respondents now expect the timing of the cuts to be later than in the previous survey, with rate cuts expected to occur in the third or fourth quarter of 2026 and the first quarter of 2027.