Rising Expectations for Federal Reserve Rate Hike
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 12 2026
0mins
Source: CNBC
- Increased Rate Hike Expectations: According to CME Group's FedWatch tracker, market expectations for any Federal Reserve rate cuts by the end of 2027 have virtually vanished, with over a 33% chance of a hike by year-end, indicating that concerns over rising living costs outweigh worries about labor market deterioration.
- Inflationary Pressures Intensify: The ongoing Iran conflict has led to soaring energy prices, contributing over 40% to the consumer price index's highest level in nearly three years, thereby increasing pressure on the Fed to consider rate hikes.
- Challenges for Incoming Chair: Incoming Fed Chair Kevin Warsh faces significant challenges with rising rate hike expectations, as both he and President Trump advocate for cuts, yet the current inflation environment makes garnering support for such moves highly unlikely.
- Cautious Market Reaction: While some economists suggest the Fed may hold rates steady, the strong market expectations for a hike reflect heightened concerns about future economic conditions, particularly in light of ongoing energy price increases.
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Analyst Views on RJF
Wall Street analysts forecast RJF stock price to rise
9 Analyst Rating
2 Buy
7 Hold
0 Sell
Hold
Current: 142.000
Low
176.00
Averages
184.00
High
196.00
Current: 142.000
Low
176.00
Averages
184.00
High
196.00
About RJF
Raymond James Financial, Inc. is a diversified financial services company that provides services to individuals, corporations and municipalities. The Company's segments include Private Client Group (PCG), Capital Markets, Asset Management, Bank and Other. PCG segment provides financial planning, investment advisory, and securities transaction services to clients through financial advisors. Capital Markets segment conducts investment banking, institutional sales, securities trading, equity research, and the syndication and management of investments in low-income housing funds and funds of a similar nature. Asset Management segment provides asset management, portfolio management and related administrative services to retail and institutional clients. Bank segment includes Raymond James Bank, a Florida-chartered state member bank, and TriState Capital Bank, a Pennsylvania-chartered state member bank. Other segment includes corporate cash balances and its private equity investments.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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See More
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- Double-Digit Growth Outlook: Analysts anticipate a double-digit EPS CAGR for FY26-FY27, supported by Disney's strong franchise IP, resilient sports exposure, scaled streaming ecosystem, and robust cash flows from Parks and Experiences, highlighting the company's diverse revenue streams.
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See More
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- Private Client Group Performance: The Private Client Group's fee-based account assets surged 28% year-over-year to $1.12 trillion, showcasing the company's appeal among high-net-worth clients and an increase in market share.
- Financial Assets Management: Financial assets under management rose 22% to $298.6 billion, highlighting the company's robust growth potential in asset management, despite flat cash sweep balances year-over-year.
- Future Outlook: While investment banking pipelines and client activity remain strong, CEO Paul Shoukry noted that deal closings may face timing uncertainties, which could impact future performance.
See More
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- Nvidia Earnings Outlook: Nvidia is set to report earnings, with high expectations that CEO Jensen Huang will once again deliver a beat, although its market cap nearing $6 trillion marks a historic high, its valuation appears relatively attractive compared to peers.
- Retail Market Dynamics: Retailers like Walmart and Target are about to release earnings, and the low consumer sentiment may affect sales performance, particularly for lower-income consumers under pressure from rising oil prices, with Walmart's low-price strategy potentially giving it a competitive edge.
See More
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- Rising Stagflation Risk: Kalshi traders indicate that the likelihood of the US economy facing stagflation has surged from 11% to nearly 40%, reflecting the dual pressures of high inflation and unemployment that could hinder economic growth.
- Dismal Inflation Data: The Bureau of Labor Statistics reported a 3.8% year-on-year increase in the consumer price index for April, the highest since May 2023, while wholesale prices also saw their largest annual rise since 2022, indicating escalating inflationary pressures.
- Stable Unemployment Rate: The latest data shows the unemployment rate held steady at 4.3% in April, remaining above 4% since May 2024, suggesting a weak labor market that could adversely affect consumer spending and economic recovery.
- Pessimistic Economic Outlook: Kalshi traders estimate the chances of a soft landing at only 21%, a significant drop from 55% in early March, reflecting diminished market confidence in future economic performance and potentially prompting investors to adopt more cautious strategies.
See More
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- Dividend Yield: The forward yield of 1.4% reflects the company's appeal in the current market environment, potentially enhancing investor interest in its stock and supporting price stability.
- Payment Schedule: The dividend will be payable on July 15, with a record date of July 1 and an ex-dividend date also set for July 1, providing investors with a clear timeline to inform their investment decisions.
- Expense Target and Growth Outlook: Raymond James has set a non-compensation expense target of approximately $2.3 billion while expecting about 1% fee growth in Q3, indicating the company's focus on cost control while remaining optimistic about future revenue growth potential.
See More
