Fed Signals Potential Rate Hike as Markets Price 55.5% Chance

The Federal Reserve has signaled a potential rate hike as market participants now price in a 55.5% chance of an increase at the September 16 FOMC meeting.

This represents a sharp jump from the 30-38% probability traders were assigning just before Fed Chair Kevin Warsh's hawkish comments at the Jackson Hole Economic Policy Symposium.

Warsh used his inaugural address to strike a notably aggressive tone on inflation, which has now been missed for over 65 consecutive months. The July 2026 CPI came in at 3.4%, well above the Fed's 2% target.