Markets are pricing in the possibility of a hike but the FED won’t do it.

And if they did, it would be a policy error that they would have to reverse course on anyway. Until the straight of Hormuz is opened and oil comes down, there is literally nothing the fed can do. Hiking into an exogenous supply shock isn’t going to bring down the price of oil. If this goes on long enough and the effects end up percolating through the economy, hiking won’t do anything meaningful and would slow growth. Stagflation “lite” is on the table.