Contrarian: Fed Cuts Zero Times in 2026 Is Overpriced at 36%

Markets now price a 36% chance of zero Fed rate cuts in all of 2026, but this is the contrarian fade. A stagflationary shock from tariffs historically forces the Fed to choose — and with unemployment likely rising as recession odds hit 28%, the Fed will eventually cut even with elevated inflation. Zero cuts all year requires perfect sustained stagflation with no labor market deterioration, a historically rare outcome. The market is over-indexing on today's oil spike as a permanent inflation signal. Buy NO (cuts happen) on the zero-cut contract — the 2025 precedent of persistent hawkishness is being extrapolated too aggressively into 2026.