Fed Meeting Looms as Markets Weigh Rate Hike Odds

Markets are closely watching the Federal Reserve's upcoming policy meeting on September 15-16, with investors divided over whether interest rates will be hiked or held steady.

A CME FedWatch tool shows that markets are nearly evenly split between a rate hike and holding interest rates steady, with a 50.6% probability of a hold decision and 49.4% chance of a 25 basis point hike.

However, some investors believe that the odds of a September hike may be dropping to zero due to the possibility of lower inflation data. Tom Lee, Fundstrat head of research, stated in a CNBC interview that 'the odds of a September hike might actually drop to zero' if both the jobs report and CPI print are weaker.

Meanwhile, Federal Reserve Governor Christopher Waller indicated that he is leaning towards holding interest rates steady at the central bank's next policy meeting, provided inflation data shows price pressures continuing to moderate. He stated 'If there is continued progress toward our 2% goal, then I am willing to support holding the policy rate at its current level.'