Fed Set for Rate Hike as Traders Anticipate 92% Chance

The Federal Reserve is set to meet on September 15, and traders are eagerly anticipating an interest rate hike. According to Fed Funds futures traders, there's a 92% chance of a rate increase, with economists predicting a 3.75-4.00% range.

The market reaction will depend more on the statement, Summary of Economic Projections (SEP), and Chairman Kevin Warsh's press conference than on the hike itself. Traders want to know what could prompt another hike, why this rate increase is happening now, and how to interpret the dot plot.

A dovish take from the Fed could boost the EUR/USD pair back toward 1.1600, while a strong 'hawkish hike' interpretation could send it testing 1.1500 support.