CME FedWatch Shows 57% Chance of a 25-Basis-Point Fed Rate Hike in September

CME's FedWatch tool shows a 57% probability that the Federal Reserve will raise rates by 25 basis points at the September 16 FOMC meeting, which would lift the target range to 3.75% to 4%. The probability of keeping rates unchanged at 3.5% to 3.75% is 43%. According to Odaily, the probability of a rate hike was 39.9% on August 21 and rose to 57% after the Jackson Hole speech on August 28, while bets on a September rate cut have largely disappeared. Polymarket data show a 52% probability that the federal funds rate will remain unchanged and a 48% probability of a hike, with related trading volume exceeding $66.6 million. Kalshi data show the same probabilities, with related trading volume above $23.8 million. Fed Chair Kevin Warsh said in a speech at the Jackson Hole Economic Policy Symposium that the Federal Reserve will stick to its 2% personal consumption expenditures inflation target and that its commitment is to discipline rather than a specific decision. Data show 12-month PCE inflation at 3.7% and the six-month reading at 4.1%.