Markets are pricing in an 85% probability of a 25 basis point rate hike by the Federal Reserve at its September 15-16 FOMC meeting, which would push the federal funds target range from 3.50%-3.75% up to 3.75%-4.00%. Core inflation stands at 2.4% year-over-year while headline CPI is at 3.4%, with oil prices above $100 per barrel accounting for a significant portion of the headline figure. At least one economist argues the hike responds more to Wall Street expectations than to actual inflation data. Fed Chair Kevin Warsh, who took office in May 2026, has adopted a notably hawkish stance, signaling the central bank’s commitment to its price stability mandate.
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