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Fed September Rate Hike Odds at 66%: CME FedWatch

As of August 31, CME FedWatch shows a 66% probability that the Fed will raise rates by 25 basis points in September, bringing the target range to 3.75%-4.00%. Fed Chair Kevin Warsh emphasized controlling inflation, with PCE at 3.7% year-over-year. Barclays expects two more hikes this year, totaling 50 basis points.

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AI take

The market's near-two-thirds pricing of a September hike, paired with Barclays' view of two more moves, signals a firmly hawkish baseline. This matters for rate-sensitive assets like crypto and RWAs, as higher-for-longer policy tends to tighten liquidity conditions. The key tension is whether the Fed's inflation focus, underscored by PCE at 3.7%, will override any emerging growth or credit stress. Watch if the odds shift toward 75-80% as the meeting nears, which would reinforce the current trajectory, or if data surprises soften that consensus.

Generated by AI for reference only.

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