Fed Rate Hike Odds Rise Amid Oil Price Spike

A Reuters poll of 104 economists predicts no change in interest rates from the Federal Reserve (Fed), but traders are betting on a different story. Fed funds futures currently price a 36% chance of a rate hike, up from 13% just last week.

Economists expect the current rates to remain between 3.50% and 3.75%, but most now see high odds of a hike later in 2026. The uncertainty comes as Chair Kevin Warsh has stopped hinting at future rate decisions, leaving traders guessing ahead of this week's central bank announcements.

Oil prices have contributed to the inflation concerns that are driving the rate hike speculation. Brent crude closed at $100.69 on July 23, its first close above $100 since May 26. Tariffs added last Friday have also increased costs for imported goods.