Federal Reserve Holds Interest Rates Steady Amid Inflation and Global Uncertainty

No change rises to 65%2%

In August, the Fed maintained the federal funds rate at 3.5%–3.75%, emphasizing ongoing inflation risks and economic resilience despite geopolitical tensions. This reinforced market confidence in the 'No change' scenario for the upcoming September meeting.

Federal Reserve Maintains Rates Amid Elevated Inflation and Economic Uncertainty

No change rises to 66%3%

In mid-August, the Fed reiterated its commitment to maintaining the federal funds rate at 3.50%-3.75%, highlighting ongoing inflationary pressures partly due to supply shocks and geopolitical tensions. The decision supported the view that the Fed would likely raise rates in September if inflation remains elevated.

Federal Reserve maintains steady rates amid solid economic growth and inflation concerns

No change dips to 72%3%

On August 15, the Fed reiterated its commitment to price stability while maintaining the federal funds rate at 3.50%-3.75%. The economy was described as expanding at a solid pace despite elevated inflation driven by supply shocks, particularly energy prices. The Fed's stance supported market expectations of no change in the near term but left open the possibility of a September hike.

Federal Reserve reiterates commitment to price stability, holds rates steady

No change jumps to 75%13%

The Fed maintained the federal funds rate at 3.5%-3.75%, citing solid economic growth and persistent inflation above target. The decision was supported by a 9-3 vote, with dissenters favoring a hike. This reaffirmed market expectations for no change in September.

July Consumer Price Index shows modest inflation rise, easing pressure on Fed

No change jumps to 62%6%

The July CPI rose 0.1% monthly with an annual rate of 3.4%, slightly easing inflation pressures but still above the Fed's 2% target. This modest increase suggested the Fed might hold rates steady in September, reinforcing the market's 'No change' pricing.

July CPI Inflation Report Shows Cooling Inflation but Persistent Pressure

25 bps increase rises to 32%4%

The July Consumer Price Index report indicated a slight easing in inflation, with year-ahead consumer expectations lowering to 4.2%. However, elevated energy prices and supply risks kept inflation above target, maintaining pressure on the Fed to consider tightening.

US Consumer Price Index Shows Persistent Inflation Above Target

The release of the US CPI data on August 12 showed inflation remaining elevated, reinforcing concerns about the Fed's inflation target and supporting expectations for a possible rate increase in September. This data likely influenced market pricing toward the 'No change' and '25 bps increase' outcomes.

July CPI inflation report shows headline inflation at 3.4%, easing slightly

No change surges to 75%16%

The August 12 release of July CPI data showed headline inflation at 3.4% year-over-year, still above the Fed's 2% target but indicating a slight easing. This report added complexity to the Fed's decision-making, balancing persistent inflation against signs of moderation.

Rising US mortgage rates and job losses signal economic strain ahead of September Fed meeting

Reports in August highlighted 23,000 jobs lost in July and a 30-year fixed mortgage rate averaging 6.69%, indicating economic strain. These developments increased market speculation about a potential Fed rate hike in September to address inflation and economic risks.

Federal Reserve interest rate remains at 3.50%-3.75% as markets await September decision

25 bps increase jumps to 44%5%

As of early August, the Federal Reserve maintained the federal funds rate at 3.50%-3.75%, with markets pricing in a significant probability of a 25 basis point hike at the upcoming September meeting. Inflation concerns and geopolitical risks continued to influence expectations for monetary policy tightening.

Rising Inflation and Geopolitical Tensions Fuel Expectations of September Rate Hike

25 bps increase drops to 31%8%

In early August, persistent inflation above the Fed's 2% target and renewed geopolitical tensions, especially the U.S.-Iran conflict affecting energy prices, led investors to price in a 67% probability of a 25 basis points rate increase at the September FOMC meeting. The Fed's hawkish signals and economic data supported this shift in market sentiment.

Political pressure mounts as President Trump calls for aggressive Fed rate cuts

No change jumps to 67%11%

President Trump publicly pressured the Federal Reserve to cut interest rates further, but Fed Chair Jerome Powell emphasized the Fed's independence and commitment to data-driven policy, which supported market confidence in no change for the September meeting.

July jobs report shows weakening labor market, influencing Fed expectations

The July jobs report revealed a decline in nonfarm payrolls and a slight drop in unemployment, reinforcing signs of a cooling labor market and affecting market views on the Fed's potential September decision.

July jobs report shows 23,000 job losses, raising recession concerns

No change surges to 54%15%

The July employment report revealed a loss of 23,000 jobs and downward revisions to prior months, signaling labor market weakening. This mixed signal complicated the Fed's outlook, tempering expectations for aggressive rate hikes and supporting some market optimism for no change.

July Jobs Report Shows Labor Market Weakening with Job Losses

No change surges to 63%23%

The July employment report revealed a loss of 23,000 jobs and a slight decrease in unemployment to 4.1%, signaling a cooling labor market. This data contributed to market uncertainty about the Fed's next move, balancing inflation concerns with economic slowdown risks.

US Economy Shows Strain with Job Losses and Rising Borrowing Costs Ahead of September Fed Vote

25 bps increase jumps to 35%7%

Reports of 23,000 jobs lost in July and rising mortgage rates heightened market uncertainty ahead of the September FOMC meeting, briefly increasing expectations for a 25 bps rate hike, reflected in a temporary price rise for that outcome.

US Federal Reserve reaffirms hold on rates amid Middle East conflict and inflation concerns

No change jumps to 71%8%

In early August, the Federal Reserve reiterated its stance to keep rates steady due to ongoing elevated inflation driven by supply shocks, including energy prices linked to the Middle East conflict. The Fed emphasized its commitment to price stability while acknowledging solid economic growth and labor market conditions.

July jobs report shows labor market weakening, shifting Fed focus

25 bps increase jumps to 60%11%

The July employment report revealed a decline in nonfarm payrolls and a slight drop in unemployment, indicating a weakening labor market. This data increased market speculation that the Fed might raise rates modestly in September to combat persistent inflation.

US economy shows signs of strain amid rising borrowing costs and job losses

25 bps increase plunges to 28%16%

In early August, reports indicated the US economy was facing challenges with 23,000 jobs lost in July and rising mortgage rates averaging 6.69%. These developments increased market speculation about a potential Federal Reserve rate hike in September, contributing to shifts in market expectations and currency valuations.

July jobs data shows softer hiring, inflation forecast remains elevated

No change jumps to 49%9%

The July 2026 Nonfarm Payrolls report revealed weaker-than-expected job growth, with new jobs below consensus forecasts. The Federal Reserve's August inflation forecast projected persistent PCE inflation at 3.6%, signaling ongoing inflation risks. These data points contributed to market caution and supported expectations of a Fed pause in September.

Rising inflation and geopolitical tensions sustain rate hike expectations

25 bps increase drops to 28%9%

In early August 2026, ongoing inflation pressures driven by elevated energy prices and geopolitical uncertainty, including the Middle East conflict, maintained market expectations for a potential 25 bps rate increase in September. This contributed to fluctuations in the probabilities for 'No change' and '25 bps increase' outcomes.

Federal Reserve reiterates commitment to price stability amid elevated inflation and global uncertainty

No change jumps to 71%8%

On August 6, the Fed reaffirmed its stance to maintain rates steady at 3.50%-3.75% citing solid economic growth despite inflationary pressures from energy prices and geopolitical risks, supporting market expectations of no immediate change but potential hikes later in the year.

Federal Reserve holds interest rates steady at 3.5%-3.75%

No change jumps to 61%12%

On August 5, the Federal Reserve maintained its benchmark interest rate unchanged, citing solid economic growth despite inflation remaining above target and geopolitical uncertainty from the Middle East conflict. This reinforced market expectations for a potential September rate hike.

US Federal Reserve holds interest rates steady amid persistent inflation and geopolitical tensions

No change surges to 74%18%

The Federal Reserve maintained the federal funds rate at 3.50%-3.75% in early August, citing solid economic growth despite elevated inflation and uncertainty from the Middle East conflict. The decision supported the view that rates would remain higher for longer, sustaining market expectations for a possible September hike.

US mortgage rates rise to 6.69% amid economic strain and inflation concerns

25 bps increase rises to 31%1%

Mortgage rates climbed to 6.69% as of early August 2026, reflecting ongoing inflationary pressures and economic strain including job losses. This environment contributed to market expectations of a Fed rate hike in September to combat inflation.

US economy shows strain with job losses and rising borrowing costs ahead of September Fed meeting

25 bps increase rises to 32%4%

In early August, reports indicated 23,000 jobs lost in July and rising mortgage rates near 6.69%, signaling economic strain. These developments heightened market anticipation of a September rate hike by the Federal Reserve, as inflation remained elevated and geopolitical tensions persisted, influencing market expectations for tightening monetary policy.

US economy shows resilience with steady job gains amid inflation concerns

On August 6, 2026, reports indicated solid job gains and stable unemployment despite inflation remaining above target, supporting the Fed's cautious approach to monetary policy. This economic backdrop maintained market expectations for a possible rate hike in September rather than cuts or no change.

US Economy Shows Signs of Strain Amid Rising Borrowing Costs and Job Losses

25 bps increase plunges to 25%20%

In early August, reports indicated 23,000 jobs lost in July and rising mortgage rates near 6.69%, highlighting economic strain. These developments increased market anticipation of a Fed rate hike in September to combat inflation and stabilize the economy.

Federal Reserve Maintains Interest Rates Amid Elevated Inflation and Economic Growth

No change surges to 56%17%

The Fed kept the benchmark interest rate unchanged at 3.50%-3.75% in early August, citing solid economic growth despite global uncertainty and persistent inflationary pressures, partly due to the Middle East conflict. The decision was supported by a 9-3 vote, with dissenters favoring a rate hike due to inflation concerns.

US economy shows signs of strain with job losses and rising borrowing costs

No change surges to 55%16%

Reports of 23,000 jobs lost in July and higher mortgage rates raised concerns about economic growth, influencing market sentiment ahead of the September Fed meeting. These factors supported expectations that the Fed would likely keep rates steady to monitor economic conditions.

US Federal Reserve holds interest rates steady at 3.5–3.75% amid inflation and global uncertainty

No change surges to 63%18%

On August 5, the Federal Reserve maintained its benchmark interest rate unchanged at 3.5–3.75%, emphasizing the economy's solid growth despite inflation remaining above target and geopolitical tensions, including the Middle East conflict. The decision was supported by a 9-3 vote, with dissenters advocating for a rate hike due to inflation concerns.

Federal Reserve holds rates steady in July amid inflation concerns

No change rises to 52%4%

Following the July FOMC meeting, the Fed maintained the federal funds rate at 3.5%-3.75%, assessing inflation trends and economic outlook. The decision reflected a cautious approach with inflation still above the 2% goal and a stable labor market.

Treasury report highlights hawkish Fed outlook amid inflation and geopolitical tensions

25 bps increase jumps to 37%11%

The Treasury Borrowing Advisory Committee reported a more hawkish Fed outlook with increased inflation projections and potential rate hikes, influenced by geopolitical tensions in the Middle East and elevated energy prices, contributing to market uncertainty ahead of September.

Fed Chair Warsh's Press Conference Sparks Market Volatility and Higher Treasury Yields

25 bps increase jumps to 31%6%

Following the early August Fed meeting, Chair Kevin Warsh's guarded communication style and lack of clear forward guidance led to a selloff in bond markets, pushing Treasury yields to multi-year highs. This reflected investor concerns about persistent inflation and the possibility of future rate hikes, influencing market expectations for the September meeting.

FOMC votes 9-3 to hold rates steady amid inflation concerns

No change surges to 63%20%

The FOMC's decision to hold rates steady with some dissenters voting for an increase reflected ongoing inflation worries, initially boosting confidence in no change but also increasing uncertainty about future hikes.

Fed Chair Warsh's cautious comments shake market confidence, bond yields rise

No change jumps to 49%10%

Following the July meeting, Chair Warsh's guarded and somewhat contradictory remarks during the press conference led to a sell-off in bonds and a rise in Treasury yields, reflecting market skepticism about the Fed's future rate path and reinforcing expectations of a September hike.

Fed Chair Warsh's guarded communication shakes market confidence

25 bps increase surges to 45%20%

Following the July meeting, Chair Warsh's press conference was perceived as contradictory and overly confident, causing bond yields to rise sharply as investors priced in higher inflation risks and a hawkish Fed stance, boosting expectations for a September rate hike.

Market Data Shows Increased Probability of September Rate Hike

25 bps increase jumps to 56%14%

Following the July FOMC meeting, interest rate futures indicated a 67.2% probability of a 25 basis points hike in September, reflecting investor expectations of tightening due to persistent inflation. This market sentiment contributed to the price increase for the '25 bps increase' outcome and decline in the 'No change' option.

July ISM Manufacturing Index rises to 55.6, signaling economic expansion

No change jumps to 63%11%

The ISM Manufacturing PMI unexpectedly increased to 55.6 in July, indicating sustained growth in the manufacturing sector. This strong data prompted markets to reassess the Fed's policy path, reducing expectations for an immediate September hike but supporting a higher rate outlook later in 2026.

Federal Reserve holds interest rate at 3.75% amid DOJ criminal investigation into Chair Powell

No change surges to 63%20%

The Federal Reserve paused after three consecutive rate cuts, maintaining the benchmark interest rate at 3.75%. Chair Jerome Powell faced a Department of Justice criminal investigation over alleged false statements to Congress, adding political complexity but not altering the Fed's cautious monetary policy stance.

Rising Market Odds for September Rate Hike Amid Inflation and Geopolitical Concerns

25 bps increase rises to 56%3%

As of early August, market data indicated increasing probability of a 25 bps rate hike at the September FOMC meeting, driven by persistent inflation pressures and geopolitical tensions, particularly the Middle East conflict. This shift reflects the Fed's hawkish stance and the market's adjustment to a 'higher for longer' interest rate environment.

Geopolitical tensions ease as U.S.-Iran hostilities pause, easing inflation concerns

No change jumps to 53%14%

A temporary pause in U.S.-Iran hostilities in early August 2026 led to a decline in oil prices and reduced near-term inflation fears. This development contributed to market reassessment of Fed rate hike probabilities, slightly lowering the odds of aggressive tightening.

Markets react to Fed's July decision and geopolitical tensions easing

No change surges to 64%21%

Following the July Fed decision, markets showed volatility influenced by easing U.S.-Iran hostilities and fluctuating oil prices, which affected inflation outlooks and Fed rate expectations. This contributed to price movements favoring 'No change' and '25 bps increase' outcomes as investors reassessed risks.

Markets react to Fed's July hold with hawkish undertones and rate hike expectations

No change dips to 39%2%

Following the July 29 decision to hold rates steady, markets reacted to the hawkish tone and dissenting votes by pricing in one to two rate hikes by the end of 2026, with September seen as the most likely timing. Treasury yields rose and the US dollar strengthened, reflecting expectations of a stronger USD if a September hike occurs.

Market Reacts Sharply to Fed's Decision to Hold Rates Steady

25 bps increase jumps to 50%12%

Following the Fed's decision, Treasury yields spiked and stock markets fell sharply, reflecting investor uncertainty and increased expectations for future rate hikes. This market reaction contributed to the rising probability of a 25 bps increase in the September meeting.

New Fed Chair Kevin Warsh signals vigilance on inflation, holds rates steady

No change surges to 63%22%

At the July FOMC meeting, new Chair Kevin Warsh confirmed the committee's decision to keep rates unchanged at 3.50%-3.75%, emphasizing the Fed's readiness to act if inflation pressures persist. The meeting highlighted internal divisions with some members favoring hikes, but the overall stance was a cautious pause, influencing market pricing toward no change or a modest hike.

Federal Reserve Holds Interest Rates Steady at 3.50%-3.75% in July Meeting with Three Dissenters

No change jumps to 64%14%

The Federal Reserve held the federal funds rate steady at 3.50%-3.75% in a 9-3 vote, with three members dissenting in favor of a 25 basis point hike. Chair Kevin Warsh rejected the notion of a pause, framing the decision as a rigorous review and signaling that rate hikes remain possible, with markets pricing in a likely increase in September 2026.

FOMC Maintains Federal Funds Rate at 3.5%–3.75% with Hawkish Tone

No change dips to 40%2%

The July FOMC meeting resulted in a 9-3 vote to keep rates steady, with three dissenters favoring a 25 bps hike due to inflation concerns. The statement's hawkish language caused some market volatility but ultimately reinforced the expectation of no change in September.

Fed Chair Warsh emphasizes price stability amid divided FOMC

No change dips to 55%1%

Chair Kevin Warsh described the July FOMC meeting as a 'good family fight' with three dissenters favoring a rate hike. He emphasized the Fed's commitment to price stability and avoided forward guidance, contributing to market uncertainty but ultimately supporting a hold on rates.

Federal Reserve maintains interest rates and announces five task forces

At the July FOMC meeting, the Federal Reserve kept interest rates unchanged and announced the creation of five task forces to review monetary policy decision-making and communication, signaling a cautious approach amid persistent inflation and economic uncertainty.

Federal Reserve keeps rates unchanged amid inflation concerns and internal dissent

No change surges to 54%15%

At the July FOMC meeting, the Fed again held rates steady at 3.50%–3.75%, despite three dissenting votes favoring a 25 bps hike. Inflation remained elevated due to energy price shocks from the U.S.-Iran conflict, maintaining market uncertainty but leaning toward no change or a modest increase.

Fed holds rates steady in July with three dissenters favoring a hike

No change surges to 63%23%

On July 29, 2026, the Federal Reserve voted 9-3 to keep rates at 3.50%-3.75%, with three members dissenting in favor of a 25 basis point increase. Chair Kevin Warsh rejected the notion of a pause, framing the decision as a review period, and markets immediately priced in a likely September hike, reflecting ongoing inflation concerns and energy price pressures.

Fed Chair Kevin Warsh Commits to Press Conferences Amid Rate Decision

No change jumps to 63%7%

Following the July 29 meeting, Fed Chair Kevin Warsh committed to holding press conferences for the remainder of 2026, signaling transparency and ongoing communication about monetary policy. This helped markets interpret the Fed's cautious stance and hawkish outlook, affecting expectations for future rate moves.

Federal Reserve maintains rates at 3.50%-3.75% with no forward guidance

25 bps increase surges to 56%18%

The July 28-29 FOMC meeting resulted in a unanimous decision to keep rates steady at 3.50%-3.75% and maintain the interest rate on reserve balances at 3.65%. The Fed continued its policy of maintaining ample reserves and refrained from providing forward guidance, reinforcing the market's view that a modest rate hike is likely in the near future, supporting the rise in probability for a 25 bps increase in September.

Federal Reserve holds interest rates steady but three officials dissent favoring a hike

25 bps increase rises to 45%4%

On July 29, 2026, the Federal Reserve again held the federal funds rate steady at 3.50%-3.75%, but three FOMC members dissented, preferring a 25 bps increase due to persistent inflation and geopolitical risks. This division highlighted growing hawkish sentiment within the Fed and reinforced market expectations for a rate hike at the September meeting.

Federal Reserve Holds Rates at July Meeting with Notable Dissent

25 bps increase surges to 39%16%

At the July 28-29 meeting, the Fed again held rates steady at 3.50%-3.75%, but three regional Fed presidents dissented, favoring a rate hike. This hawkish split indicated potential for a September increase, influencing market pricing toward a 25 bps hike possibility.

Federal Reserve holds rates steady at 3.50%-3.75% with three dissenters favoring hike

25 bps increase surges to 60%36%

At the July 29 meeting, the FOMC voted 9-3 to keep rates unchanged, with dissenters advocating a 25 basis point increase due to elevated inflation and energy prices. Chair Kevin Warsh emphasized commitment to price stability and rejected the notion of a soft inflation target, signaling potential for future hikes and reinforcing market expectations for a September increase.

Fed Chair Kevin Warsh Highlights Intense Debate and Commitment to Inflation Control

25 bps increase surges to 53%16%

Following the July 29 meeting, Fed Chair Kevin Warsh described the internal debate as a 'good family fight' and reiterated the Fed's commitment to price stability, emphasizing there is no 'soft inflation target.' This communication reinforced market expectations of potential rate hikes if inflation remains elevated, influencing the rise in the 25 bps increase probability.

Fed Chair Warsh emphasizes commitment to 2% inflation target amid divided Fed

25 bps increase rises to 60%4%

During the July 29 press conference, Chair Kevin Warsh reiterated the Fed's commitment to price stability and acknowledged the divided views within the committee. His remarks reinforced market expectations for a possible rate hike in September if inflation remains elevated.

Federal Reserve announces maintenance of interest rate paid on reserve balances at 3.65%

No change jumps to 49%8%

The Fed's unanimous decision to maintain the interest rate on reserve balances at 3.65% signaled continued monetary policy caution ahead of the September meeting, reinforcing expectations of no immediate rate hikes or cuts.

Fed Chair Warsh commits to press conferences amid market volatility

No change surges to 68%15%

Following the July meeting, Fed Chair Kevin Warsh committed to continuing press conferences for the remainder of 2026, aiming to improve communication amid internal divisions and market volatility caused by inflation and geopolitical tensions. This transparency helped stabilize market expectations around the Fed's policy path.

Fed Chair Kevin Warsh signals commitment to price stability amid inflation concerns

25 bps increase jumps to 60%6%

At the July FOMC press conference, Chair Warsh emphasized the Fed's focus on restoring price stability and indicated that the committee remains data-dependent, keeping the possibility of future rate hikes open given persistent inflation.

Fed holds rates steady with three dissenters favoring a hike

No change surges to 68%22%

On July 29, 2026, the Federal Reserve again held the federal funds rate at 3.50%–3.75% in a 9-3 vote, with three members dissenting for a 25 basis point increase. Chair Warsh rejected the notion of a pause, framing the decision as a rigorous review and signaling that rate hikes remain possible, which led markets to price in a likely September hike.

Fed Chair Warsh rejects pause, signals possible rate hikes in September

No change surges to 67%28%

Chair Kevin Warsh explicitly rejected the idea of a pause in rate changes, describing the July hold as the beginning of a story. His hawkish tone led markets to price in one to two rate hikes by the end of 2026, with September seen as the most likely timing for the first increase.

Fed Chair Kevin Warsh Emphasizes Commitment to Inflation Target Despite Rate Pause

25 bps increase rises to 19%3%

Chair Kevin Warsh reiterated the Fed's commitment to returning inflation to the 2% target, dismissing any notion of a 'soft' inflation target. He indicated that while rates were held steady, future hikes remain possible if inflation persists, influencing market expectations toward a likely 25 bps increase in September.

Federal Reserve Holds Rates at 3.50%-3.75% with Three Dissenters Favoring a Hike

No change surges to 59%20%

At the July 29 meeting, the Fed held rates steady in a 9-3 vote, with three members dissenting in favor of a 25 basis point increase. Chair Kevin Warsh rejected the notion of a pause, framing the decision as a rigorous review and signaling that rate hikes remain possible, with markets pricing in a likely September increase.

Fed Chair Warsh signals ongoing 'family fight' over rate policy amid inflation and geopolitical risks

25 bps increase surges to 56%16%

Chair Kevin Warsh described internal Fed debates as a 'family fight' reflecting differing views on inflation risks and rate policy. The Fed scrapped forward guidance, increasing uncertainty about future moves. Elevated inflation driven by energy prices and Middle East tensions contributed to market expectations of a possible rate hike in September.

Federal Reserve Holds Rates Steady at 3.50%-3.75% in July with Three Dissenters Favoring Hike

No change rises to 43%2%

At the July FOMC meeting, the Federal Reserve kept rates unchanged but faced a rare three-way dissent from members advocating a 25 basis point increase due to elevated inflation and energy prices. Chair Kevin Warsh rejected the notion of a pause, signaling that the decision was a review step ahead of a likely September hike, which markets quickly priced in.

FOMC holds rates steady but signals possible September hike

25 bps increase surges to 54%42%

At the July 29 meeting, the Fed kept rates unchanged but noted inflation remains above target and economic activity is solid, with some dissenters favoring a rate increase. This hawkish tone increased market expectations for a 25 bps hike in September.

Federal Reserve Keeps Rates Unchanged at July Meeting Amid Inflation Concerns

25 bps increase surges to 56%19%

At the July 28-29 meeting, the FOMC voted 9-3 to hold the federal funds rate steady at 3.50%-3.75%, with some dissenters favoring a hike. The decision reflected ongoing concerns about inflation remaining above target, leading markets to price in a possible rate increase in September, which influenced the rise in the '25 bps increase' option price.

Federal Reserve issues statement maintaining interest rate paid on reserve balances at 3.65%

The Federal Reserve confirmed its monetary policy stance by maintaining the interest rate on reserve balances, signaling no immediate change to the federal funds rate ahead of the September meeting. This helped stabilize market expectations for no rate change.

Fed meeting preview highlights internal debate and market expectations for September rate move

Ahead of the July 28-29 FOMC meeting, market participants anticipated a cautious Fed stance with a 62% probability of no change and 38% chance of a rate hike. The Fed faced a "family fight" over policy direction amid mixed inflation and labor market data, setting the stage for September decisions.

Fed leadership signals possible rate hike amid inflation and labor market concerns

25 bps increase jumps to 52%14%

Ahead of the September meeting, Fed Chair Kevin Warsh described internal debates as a "family fight" over future rate moves, with investors increasingly anticipating a 25 bps hike due to persistent inflation and a resilient labor market. This contributed to rising market prices for the 25 bps increase outcome.

Investors anticipate Fed rate hike in September amid inflation and geopolitical tensions

25 bps increase jumps to 54%13%

By late July 2026, investors increasingly expected a 25 bps rate hike at the September FOMC meeting, driven by persistent inflation, energy price volatility from Middle East tensions, and a resilient labor market. Market data showed a 55% chance of a 25 bps increase and 26% chance of a 50+ bps hike, reflecting growing hawkish sentiment.

Rising market odds for a 25 bps Fed rate hike in September amid inflation and geopolitical tensions

25 bps increase surges to 50%22%

As of late July, market expectations increased for a 25 basis point rate hike at the September FOMC meeting, driven by persistent inflation pressures and geopolitical risks such as the conflict in the Middle East. The bond market reflected this with rising Treasury yields, and analysts highlighted the Fed's internal debate described by Chair Warsh as a "family fight" over future rate policy.

Rising geopolitical tensions and inflation concerns influence Fed rate hike expectations

25 bps increase jumps to 45%9%

Escalating tensions between the U.S. and Iran, along with persistent inflationary pressures, increased market expectations for a 25 basis point rate hike at the September Fed meeting. Analysts noted that the labor market remained resilient, and inflation risks were elevated, prompting investors to price in a higher likelihood of rate increases.

Market anticipates Fed rate hike in September amid inflation and geopolitical tensions

25 bps increase jumps to 37%6%

As the September FOMC meeting approaches, market odds for a 25 bps rate hike increased to around 55%, reflecting concerns over inflation and geopolitical risks. This anticipation was driven by recent economic data and Fed officials' hawkish comments, impacting market pricing ahead of the meeting.

Market Pricing Shows 55% Chance of 25 bps Fed Rate Hike in September 2026

25 bps increase jumps to 36%8%

As of late July, market data indicated a 55% probability of a 25 basis point rate increase at the September FOMC meeting, reflecting growing investor expectations for tightening monetary policy amid persistent inflation and geopolitical risks. This sentiment influenced the rising price for the 25 bps increase outcome in the prediction market.

Rising market expectations for September Fed rate hike amid inflation and geopolitical tensions

25 bps increase surges to 45%21%

By late July, market data indicated a growing probability of a 25 bps rate increase in the September FOMC meeting, driven by persistent inflation pressures and geopolitical risks such as the US-Iran conflict. Analysts highlighted the Fed's internal debates and the possibility of tightening monetary policy if inflation remains elevated.

Market odds rise for 25 bps Fed rate hike in September amid inflation and geopolitical concerns

25 bps increase jumps to 59%9%

By late July 2026, market expectations for a 25 basis points rate increase in September rose to about 55%, driven by persistent inflation and tensions in the Middle East. This shift in sentiment contributed to the rising probability of the 25 bps increase outcome in the prediction market.

Market anticipates 25 bps rate hike in September amid hawkish Fed signals

25 bps increase jumps to 48%10%

Investor expectations shifted toward a 55% probability of a 25 bps increase at the September FOMC meeting, driven by hawkish comments from Fed officials and persistent inflation concerns, reflected in rising prices for the 25 bps increase outcome in prediction markets.

Fed Vice Chair Jefferson Discusses Navigating Economic Shocks Amid Inflation and Geopolitical Risks

No change dips to 43%2%

Vice Chair Philip N. Jefferson highlighted the challenges the Fed faces balancing inflation control with economic growth amid ongoing geopolitical tensions and energy price volatility. His remarks underscored the Fed's cautious approach and the conditional nature of future rate decisions, influencing market expectations for September.

Governor Lisa D. Cook highlights strong GDP growth and labor productivity

25 bps increase jumps to 49%7%

In a speech, Governor Cook reported that GDP growth in 2025 was 2.0% and forecasted 2.2% for 2026, exceeding prior expectations. She emphasized booming labor productivity, reinforcing the Fed's view of a resilient economy, supporting the likelihood of a rate hike.

Federal Reserve Governor Cook Highlights Economic Resilience and Inflation Challenges

Governor Cook's speech emphasized stronger-than-expected GDP growth forecasts for 2026 and persistent inflation above target, driven by core goods prices and productivity growth. This reinforced market expectations that the Fed would maintain a cautious stance on rates, with potential hikes if inflation remains elevated.

Federal Reserve Governor Lisa Cook signals inflation risks outweigh employment concerns

25 bps increase jumps to 53%8%

In a speech on July 15, Governor Lisa Cook highlighted that inflation remains well above the Fed's 2% target and supports maintaining restrictive monetary policy until stronger evidence of sustained disinflation emerges. This hawkish tone contributed to increased market pricing for a 25 bps rate hike.

House Financial Services Committee Hears Fed Chair Warsh Testimony on Monetary Policy

25 bps increase jumps to 51%13%

Federal Reserve Chair Kevin Warsh testified before the House Committee on Financial Services, emphasizing the Fed's commitment to price stability and signaling a cautious but hawkish stance. This reinforced market expectations for a possible rate hike in September, contributing to the rise in the 25 bps increase contract price.

Fed Chair Kevin Warsh testifies before House Financial Services Committee

25 bps increase jumps to 49%13%

Kevin Warsh testified emphasizing the Fed's commitment to price stability and signaling that interest rate hikes may be necessary if inflation does not cool. This reinforced market expectations for a 25 bps increase in the near future, contributing to rising probabilities for a rate hike in September.

June CPI Data Shows Inflation Remains Elevated at 3.4% Annual Rate

25 bps increase surges to 38%22%

The Consumer Price Index for June 2026 indicated inflation at 3.4% annually, slightly down from May but still above the Fed's 2% target, reinforcing expectations for continued vigilance on inflation and potential rate hikes.

June 2026 CPI inflation falls to 3.5%, below expectations

The June 2026 Consumer Price Index showed inflation cooling to 3.5%, driven by a sharp drop in energy prices, providing the Fed some breathing room but leaving uncertainty due to geopolitical risks and core inflation remaining sticky.

June CPI Inflation Falls to 3.5%, Below Forecast

No change dips to 39%2%

The Consumer Price Index for June 2026 showed a decline in inflation to 3.5%, below expectations, but core shelter inflation remained elevated. This data was closely watched ahead of the July FOMC meeting and influenced market expectations for the Fed's rate decision.

June CPI report shows inflation falls to 3.5%, but core shelter inflation remains elevated

No change dips to 59%2%

The July 14 release of June CPI data showed a decline in headline inflation to 3.5%, below forecasts, but core shelter inflation stayed high, indicating ongoing inflationary pressures that support the Fed's cautious stance on rate changes.

Federal Reserve Chair Kevin Warsh Signals Hawkish Stance in July Speeches

25 bps increase surges to 38%22%

In speeches during July 2026, Chair Warsh emphasized the Fed's focus on price stability and the challenges posed by inflation and geopolitical risks, contributing to market expectations of a possible rate hike in September.

Fed Officials Deliver Speeches Highlighting Inflation Persistence and Economic Outlook

25 bps increase rises to 39%2%

Several Federal Reserve officials, including Vice Chair Michelle Bowman and Governor Michael Barr, gave speeches emphasizing the challenges of persistent inflation and the Fed's commitment to price stability. These communications reinforced market expectations for a cautious approach, supporting the probability of a rate hike later in 2026.

Federal Reserve Officials Deliver Hawkish Speeches Highlighting Inflation Risks

25 bps increase jumps to 51%13%

Federal Reserve Board Governor Christopher J. Waller and Vice Chair Michelle W. Bowman gave speeches emphasizing persistent inflation risks and the need for cautious monetary policy. These remarks contributed to market expectations of a potential rate hike later in 2026, increasing the probability of a 25 bps increase in September.

Governor Cook warns inflation remains above expectations for 2026

25 bps increase surges to 53%28%

Governor Lisa Cook highlighted that headline and core inflation for 2026 are running about 1 percentage point higher than expected, driven by core goods prices rising at a 5% annual pace, reinforcing the Fed's hawkish stance and market anticipation of a rate hike.

Speech by Governor Cook emphasizes resilient economic growth and inflation outlook

No change rises to 59%2%

Governor Cook highlighted stronger-than-expected GDP growth and inflation forecasts, reinforcing expectations that the Fed would maintain or cautiously adjust rates, influencing market sentiment toward no change or a modest hike.

Market speculation rises on possible Fed rate hike amid inflation concerns

25 bps increase surges to 38%23%

Following hotter inflation data and hawkish Fed tone, markets increased expectations for a rate hike by September, reflecting uncertainty about inflation trajectory and Fed policy.

Federal Reserve Inflation Gauge Surges Above 4% in June 2026

25 bps increase surges to 59%21%

The Fed's preferred inflation measure, the PCE price index, rose to 4.1% in June, the highest since April 2023, signaling persistent inflationary pressures. This development increased market expectations for a rate hike later in 2026 to combat inflation.

Federal Reserve holds rates steady but signals hawkish outlook

25 bps increase surges to 35%19%

On June 17, the Federal Reserve kept the federal funds rate at 3.50%-3.75% but released a more hawkish dot plot indicating expectations for higher rates by year-end, shifting market sentiment towards anticipating a rate hike later in 2026.

Kevin Warsh's first FOMC meeting emphasizes price stability, holds rates steady

At his first FOMC meeting as Fed Chair, Kevin Warsh maintained the federal funds rate at 3.5%-3.75%, signaling a focus on combating elevated inflation while deemphasizing maximum employment. This hawkish tone led markets to price in potential future hikes but no immediate change.

Federal Reserve Board Votes Unanimously to Maintain Interest Rate Paid on Reserve Balances

No change surges to 81%28%

The Federal Reserve Board of Governors unanimously maintained the interest rate paid on reserve balances at 3.65 percent effective June 18, 2026, supporting the FOMC's decision to hold the federal funds rate steady. This reinforced the Fed's cautious stance amid ongoing inflation and economic conditions.

Federal Reserve maintains rates at 3.50%-3.75% with hawkish tone in June meeting

No change jumps to 63%7%

The FOMC unanimously decided to keep the target range unchanged and removed language suggesting an easing bias, signaling caution about inflation risks. This hawkish stance caused markets to reassess rate cut expectations, supporting the 'No change' outcome and reducing the likelihood of rate decreases.

FOMC unanimously maintains federal funds rate at 3.50%-3.75% amid solid growth

No change drops to 71%5%

The Federal Reserve's Federal Open Market Committee voted unanimously to keep the target range steady, citing solid economic activity and elevated inflation. The statement noted uncertainties from geopolitical tensions but reaffirmed commitment to price stability, supporting market expectations for no immediate rate change.

Federal Reserve holds federal funds rate steady at 3.50%-3.75% in June meeting

The FOMC unanimously decided to maintain the target range for the federal funds rate at 3.50% to 3.75%, citing solid economic activity and stable labor market conditions despite elevated inflation and geopolitical uncertainty. This decision reinforced market expectations for no immediate rate changes.

Federal Reserve removes easing bias, signals possible rate hike later in 2026

No change dips to 76%3%

At the June meeting, the Fed removed language indicating a bias toward future rate cuts and signaled that a rate hike is possible later in 2026 due to accelerating inflation and a stable labor market. This hawkish shift caused markets to reassess expectations, reducing the likelihood of cuts and increasing the probability of hikes.

New Fed Chair Kevin Warsh holds rates steady, ends forward guidance

No change dips to 73%2%

At the June FOMC meeting, new Chair Kevin Warsh maintained the federal funds rate at 3.50%-3.75% and stopped providing forward guidance, signaling a data-dependent approach. This increased market uncertainty but supported the no change outcome in the near term.

Federal Reserve Holds Rates Steady at 3.5%–3.75% in June Meeting

The FOMC unanimously voted to maintain the target federal funds rate at 3.5% to 3.75%, citing solid economic activity and elevated inflation. This decision reinforced market expectations for no immediate rate changes, supporting the 'No change' outcome in the September meeting.

Federal Reserve holds interest rates steady at 3.50%-3.75% in June meeting

25 bps increase plunges to 38%18%

The FOMC unanimously voted to maintain the federal funds rate at 3.50%-3.75%, citing solid economic growth and persistent inflation above the 2% target. The statement removed easing bias language and signaled a hawkish pivot with projections indicating possible rate hikes later in 2026, influencing market expectations toward a higher rate environment.

Federal Open Market Committee unanimously maintains federal funds rate at 3.50%-3.75%

No change drops to 69%5%

The FOMC voted 12-0 to keep the target range unchanged, removing language suggesting an easing bias and emphasizing the need to deliver price stability amid elevated inflation and economic uncertainty.

Federal Reserve Holds Interest Rates Steady at 3.50%-3.75% in June Meeting

The FOMC unanimously voted to maintain the federal funds rate at 3.50%-3.75%, citing solid economic expansion and persistent inflation above the 2% target. This decision reflected a cautious approach amid mixed economic signals, with policymakers emphasizing the need to monitor inflation and labor market conditions before adjusting rates.

Fed signals hawkish outlook, removing forward guidance on rate cuts

At the June FOMC meeting, the Fed left rates steady but delivered a more hawkish message by removing prior forward guidance and signaling inflation risks remain, causing markets to reassess the likelihood of future hikes versus cuts.

Federal Reserve maintains target federal funds rate at 3.50%-3.75% in June meeting

The FOMC decided to keep rates steady amid persistent inflation and a resilient labor market, reflecting a split among policymakers on whether to cut or hold rates. This reinforced market expectations for no change in the upcoming September meeting.

May 2026 CPI report shows inflation at 4.2%, highest in three years

25 bps increase rises to 16%4%

The U.S. Bureau of Labor Statistics released the May 2026 Consumer Price Index report showing a 4.2% year-over-year inflation rate, driven largely by a 40% spike in gasoline prices due to Middle East conflict. This report heightened concerns about persistent inflation, influencing the Fed's hawkish tone at the upcoming June meeting.

US CPI inflation rises to 4.2%, highest in three years

25 bps increase jumps to 23%7%

The Consumer Price Index report released on June 10 showed inflation surged to 4.2% year-over-year in May 2026, driven largely by energy prices, intensifying pressure on the Federal Reserve to consider tightening monetary policy.

U.S. Consumer Price Index for May 2026 shows inflation at 4.2%, highest in 3 years

25 bps increase surges to 39%23%

The May 2026 CPI report revealed a 4.2% year-over-year inflation rate, driven largely by energy price increases amid Middle East tensions, signaling persistent inflationary pressures that challenged expectations of rate cuts and supported a hawkish Fed outlook.

U.S. inflation rises to 4.2% in May, highest in three years

25 bps increase rises to 16%4%

Consumer prices surged 4.2% year-over-year in May, driven largely by energy price increases due to the Iran conflict, complicating the Fed's inflation outlook and increasing expectations for rate hikes. This inflation spike reinforced the Fed's cautious stance and hawkish projections in June.

US Consumer Price Index rises 4.2% in May, highest in three years

The May 2026 CPI report showed a 4.2% year-over-year increase, driven primarily by a 40% spike in gasoline prices, signaling persistent inflationary pressures. This data reinforced market expectations that the Federal Reserve would maintain or potentially raise interest rates to combat inflation.

Reuters poll shows majority expect Fed to hold rates for rest of 2026

A Reuters poll of economists indicated a strong consensus that the Federal Reserve would keep interest rates steady through the remainder of 2026 due to persistent inflation and geopolitical risks, reinforcing market pricing for no change in September.

Economists largely expect Fed to hold rates for rest of 2026 amid persistent inflation

A Reuters poll showed a strong majority of economists forecast the Federal Reserve will keep interest rates steady through the rest of 2026, reflecting persistent inflation driven by war-related factors. This consensus marked a shift from earlier expectations of rate cuts, reinforcing market pricing of no change in the near term.

Economists predict Fed will hold rates for rest of 2026 amid persistent inflation

A Reuters poll showed a strong majority of economists expect the Federal Reserve to keep interest rates steady through 2026 due to ongoing inflation pressures driven by war-related supply shocks and resilient economic indicators, reducing expectations for rate cuts this year.

Majority of economists expect Fed to hold rates for rest of 2026 amid persistent inflation

No change jumps to 57%7%

A Reuters poll showed that nearly 70% of economists forecast the Federal Reserve would keep its key interest rate unchanged through the rest of 2026, reflecting concerns over persistent inflation driven by geopolitical tensions and energy prices. This consensus marked a shift away from earlier expectations of rate cuts, reinforcing market pricing for a stable or higher rate environment.

May 2026 jobs report shows strong employment growth with 172,000 jobs added

25 bps increase rises to 16%4%

The May 2026 jobs report revealed a stronger-than-expected labor market with 172,000 jobs added, reinforcing the Fed's hawkish stance due to resilient employment and supporting expectations of future rate hikes.

May 2026 Nonfarm Payrolls report shows strong job growth of 172,000

25 bps increase jumps to 21%5%

The May 2026 jobs report exceeded expectations with 172,000 new jobs added, reinforcing the Fed's hawkish stance by demonstrating labor market resilience despite inflationary pressures, increasing the likelihood of rate hikes later in the year.

Jerome Powell defends Fed independence in JFK award speech

Former Fed Chair Jerome Powell publicly defended the Federal Reserve's independence against political pressure, emphasizing the importance of non-political monetary policy. This reinforced market confidence in the Fed's commitment to its dual mandate, supporting expectations of steady rates.

Fed officials signal possible future rate hike amid rising inflation risks

No change surges to 82%29%

Federal Reserve officials indicated that if inflation continues to rise, especially due to geopolitical tensions like the Middle East conflict, the Fed may need to raise interest rates in the future. This cautious hawkish tone contributed to market uncertainty about rate cuts and hikes.

Fed officials signal possible future rate hikes amid rising inflation risks

25 bps increase drops to 12%14%

On May 29, 2026, Federal Reserve officials indicated readiness to raise interest rates if inflation remains elevated, reflecting concerns over persistent inflation driven by geopolitical factors. This hawkish stance increased market expectations for rate hikes later in the year, reducing the likelihood of cuts in 2026.

Fed officials signal readiness to raise rates if inflation persists amid Middle East conflict

No change surges to 81%28%

On May 29, Federal Reserve officials indicated that while there was no immediate urgency to adjust rates, they remained prepared to raise interest rates if inflation continued to rise due to geopolitical tensions, particularly the conflict in the Middle East. This hawkish tone contributed to market uncertainty about future rate hikes.

Fed officials signal possible rate hike amid inflation risks from Middle East conflict

25 bps increase jumps to 21%5%

Federal Reserve officials indicated readiness to raise interest rates if inflation risks persist, particularly due to the Middle East conflict pushing energy prices higher. While some officials saw no urgency to adjust rates immediately, hawkish dissenters highlighted inflation concerns, influencing market expectations for future tightening.

Fed officials signal possible rate hike if inflation persists amid Middle East conflict

No change drops to 44%12%

Federal Reserve officials indicated readiness to raise interest rates if inflation remains elevated due to the ongoing Middle East conflict, highlighting inflation risks but no immediate urgency to adjust rates. This contributed to market uncertainty about future hikes versus holds.

Federal Reserve Officials Signal Possible Future Rate Hikes Amid Inflation Risks

25 bps increase drops to 12%14%

Fed officials indicated readiness to raise interest rates if inflation driven by the Middle East conflict persists, though no immediate changes were made. This hawkish stance contributed to market expectations of a rate hike later in 2026, influencing price movements in the prediction market.

Fed officials signal readiness to raise rates amid inflation risks from Middle East conflict

25 bps increase rises to 28%2%

Federal Reserve officials indicated on May 29 that they may need to raise interest rates if inflation driven by the Middle East conflict persists, increasing market expectations for future tightening despite no immediate change. This hawkish tone contributed to early market pricing of potential rate hikes later in 2026.

Fed Governor Cook Highlights AI and Economic Outlook at Stanford

No change surges to 74%21%

Governor Lisa D. Cook's speech emphasized resilient economic output and inflation expectations, reinforcing the Fed's cautious stance on rate changes. This helped maintain market confidence in a steady policy, supporting the 'No change' outcome.

Fed Governor Waller Discusses Economic Outlook Amid Inflation and Tariff Effects

No change surges to 74%21%

Governor Christopher J. Waller's speech highlighted the modest effects of import tariffs on inflation and the ongoing elevated inflation pressures, signaling cautious Fed policy. This contributed to early market positioning for no rate cuts and potential future hikes, supporting the 'No change' outcome.

New Fed Chair Kevin Warsh signals data-driven approach, no immediate rate cuts

25 bps increase drops to 17%9%

Following his appointment in May 2026, Fed Chair Kevin Warsh emphasized a data-dependent monetary policy approach, avoiding forward guidance and indicating that rate cuts are unlikely soon given persistent inflation. This stance contributed to a decline in market expectations for rate decreases and a gradual increase in the probability of a 25 bps rate hike by September.

Kevin Warsh sworn in as new US Fed chair

25 bps increase rises to 14%3%

Kevin Warsh officially took office as Federal Reserve Chair on May 22, 2026, beginning his leadership amid inflation pressures and political scrutiny, setting the stage for his first FOMC meeting and potential policy shifts.

Kevin Warsh sworn in as new Federal Reserve Chairman

No change surges to 81%28%

Kevin Warsh took over as Fed Chair, signaling a shift toward data-driven monetary policy without forward guidance, increasing market uncertainty about future rate moves.

Kevin Warsh appointed as new Federal Reserve Chairman

No change dips to 74%2%

Kevin Warsh succeeded Jerome Powell as Fed Chair, signaling a shift towards data-driven policy without forward guidance. This increased market uncertainty about future rate moves, contributing to fluctuating expectations but overall supporting a cautious approach with no immediate rate changes.

Kevin Warsh sworn in as new Federal Reserve Chair at White House

Kevin Warsh was officially sworn in as the 17th Chair of the Federal Reserve, marking a leadership transition from Jerome Powell. His appointment introduced market uncertainty about future rate policy, as Warsh emphasized independence and reform but faced political pressures.

Kevin Warsh succeeds Jerome Powell as Federal Reserve Chairman

Kevin Warsh took over as Fed Chair, emphasizing data-driven decisions without forward guidance, which increased uncertainty about future rate moves. This leadership change contributed to market volatility and influenced expectations around the September meeting.

Kevin Warsh appointed new Federal Reserve Chair, signals data-driven policy

Kevin Warsh took over as Fed Chair and emphasized reacting to economic data rather than providing forward guidance, increasing uncertainty about future rate moves. This contributed to market indecision but generally supported the 'No change' and '25 bps increase' outcomes as most probable.

Kevin Warsh confirmed as new Federal Reserve Chairman

25 bps increase drops to 17%9%

The Senate confirmed Kevin Warsh as the new Fed Chair on May 13, and his leadership was expected to mark a shift in monetary policy. This appointment influenced market expectations, as Warsh was seen as more hawkish compared to his predecessor, contributing to early price movements favoring a rate increase.

Speech by Governor Waller highlights inflation concerns and market expectations

Governor Waller expressed concerns about rising inflation expectations, signaling vigilance on inflation risks which contributed to market anticipation of a possible rate increase.

Fed officials see rate hike ahead if inflation stays elevated, minutes show

No change surges to 81%28%

Minutes from the Fed's May meeting revealed that many officials anticipated the need for interest rate increases if inflation, exacerbated by the Iran war, remained high. This signaled a shift away from earlier expectations of rate cuts and contributed to market uncertainty.

Fed Minutes Reveal Split Views on Inflation and Rate Cuts Amid Middle East Conflict

Minutes from the May 2026 FOMC meeting showed a divided committee with some participants advocating for rate cuts if inflation pressures eased and the Middle East conflict resolved, while others expressed concern about embedded inflation risks due to elevated energy prices and tariffs. This uncertainty contributed to market volatility and shifting rate hike probabilities.

Fed Officials See Rate Hike Ahead if Inflation Remains Elevated

25 bps increase jumps to 38%12%

Minutes from the May 2026 meeting revealed that many Fed officials anticipated the need for interest rate increases if inflationary pressures, exacerbated by geopolitical tensions, persisted. This hawkish sentiment contributed to market pricing in a higher likelihood of rate hikes later in 2026, influencing the market's evolving expectations.

Stronger-than-expected inflation report shifts market outlook away from rate cuts

25 bps increase jumps to 38%12%

A May inflation report showed a 4.2% annual CPI increase, the highest in three years, raising concerns about persistent inflation and reducing expectations for near-term Fed rate cuts. This led markets to price in a higher chance of a rate hike later in 2026.

US inflation rises 4.2% year over year, highest in three years

No change plunges to 50%17%

Inflation data released in May showed a 4.2% increase year over year, the highest in three years, dampening hopes for rate cuts and supporting expectations that the Fed would maintain or raise rates to combat inflation.

Market anticipates Fed rate cut path in 2026 amid economic uncertainty

No change rises to 55%2%

Early in the analysis window, markets priced in a significant probability of rate cuts in 2026, reflecting uncertainty about inflation and economic growth. However, this sentiment shifted as inflation remained elevated and the Fed under new leadership signaled a more hawkish stance, reducing expectations for cuts and increasing the likelihood of hikes later in the year.

Kevin Warsh confirmed as Federal Reserve Chair by Senate

25 bps increase plunges to 11%15%

Kevin Warsh's confirmation as Fed Chair introduced expectations of a hawkish monetary policy stance amid ongoing inflation challenges, influencing market pricing toward a potential rate hike later in 2026.

Federal Reserve maintains steady rates amid mixed economic signals

At the start of the analysis window, the Fed held rates steady as economic data showed mixed signals on inflation and growth. Market prices reflected uncertainty, with the 'No change' and '25 bps increase' options both holding significant probabilities.

Federal Reserve holds interest rates steady at 3.50%-3.75% amid inflation concerns

The Fed decided to keep rates unchanged in its first 2026 meeting, citing elevated inflation and geopolitical uncertainty, particularly the Iran conflict, as reasons to pause further cuts. This decision reinforced market expectations for no change in the near term.

Inflation rises to highest level in three years amid Iran conflict

25 bps increase drops to 12%14%

US inflation rose 4.2% year over year in May, the highest in three years, driven by energy price spikes and supply chain disruptions from the Iran war. This diminished hopes for rate cuts and increased the likelihood of rate hikes later in 2026.

US inflation rises to 4.2% in May, highest in three years amid energy price shock

25 bps increase drops to 12%14%

US Consumer Price Index inflation accelerated to 4.2% year-over-year in May 2026, driven mainly by energy price shocks linked to Middle East conflicts. This surge diminished hopes for rate cuts and increased market expectations for a potential rate hike later in the year.