Fed Rate Hike Looms as Inflation Sticks and Consumer Confidence Plunges

The US core Consumer Price Index (CPI) rose 0.3% month-over-month in August, exceeding expectations of a 0.2% increase, and is driving market fears of further monetary tightening.

This has intensified the likelihood of a Federal Reserve interest rate hike at its September 15-16 meeting, with an implied probability of 86.3%, according to the CME FedWatch Tool as of September 12, 2026.

The 10-year US Treasury yield flirted with the psychologically significant 5% level on September 12, while 30-year fixed mortgage rates climbed above 6.9% for the first time in this tightening cycle.