BlockBeats News, May 8th: In Federal Reserve interest rate decisions, a greater divergence of opinions often tends to prolong the maintenance of the interest rate. In the recent April 2026 FOMC meeting, the Fed set a record for the largest divergence since 1992 with an 8-4 vote, deciding to keep the federal funds rate target range unchanged at 3.5%-3.75% for the third consecutive time. While one official supported an immediate 25bp rate cut, three others, while agreeing to hold rates steady, expressed a dovish bias in their dissents. There is a profound internal division within the Fed on inflation risks, the labor market, and the neutral rate level.

As the economic outlook diverges among Fed members, the difficulty of reaching a consensus on rate adjustments increases simultaneously, leading to an "inertia" that maintains the status quo. Policy often remains on hold at the current level for a longer period to await more data to resolve uncertainty. With the federal funds rate already near the neutral range, this divergence directly points to an increasing probability of rates staying unchanged for a longer period, rather than a swift pivot. It is expected that the waiting period for the market will extend.

According to CME FedWatch data, the probability of no further rate cuts by the end of 2026 is 72.6%, the probability of a cumulative 25 basis point rate cut for the year is 8.5%, the probability of a cumulative 50 basis point rate cut is 0.3%, the probability of a cumulative 25 basis point rate hike is 17.6%, and the probability of a cumulative 50 basis point rate hike is 1%.

Furthermore, the probability of a 25 basis point rate cut at the next Fed meeting in June is 4.1%.