FedWatch: Odds of a 25-bp Fed hike on Sept. 25 climb to 57%
AI Market Summary
CME FedWatch now prices a 57% chance of a 25bp Fed hike on Sept. 25 after a more hawkish-than-expected Waller Jackson Hole speech, raising the bar for confidence that inflation is cooling toward 2%. Higher expected policy rates typically tighten financial conditions and support the USD. Near-term positioning remains highly sensitive to upcoming CPI and nonfarm payrolls, where further labor-market weakness could quickly reverse hike odds.
Impact level
● High
Affected assets
NCSIDXY2USD/USDT+0.01%
AI Insight · NCSIDXY2USD/USDTAI Insight
▼ Bearish
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Huo Xing Finance reports that CME's FedWatch tool, as of Aug. 30, shows markets pricing a 43% chance the Federal Reserve keeps rates unchanged in September, versus a 57% probability of a 25-basis-point increase.
The shift follows hawkish remarks from Fed Governor Christopher Waller at Jackson Hole on Friday evening, which were firmer than investors had anticipated. Waller said that if policymakers cannot be confident inflation is "falling clearly and sufficiently fast" toward 2%, the Fed "has more work to do," signaling additional tightening remains possible if price pressures fail to ease.
Ahead of the September FOMC meeting, markets will also digest a nonfarm payrolls report and a CPI inflation print, along with several secondary data releases. With recent U.S. employment reports repeatedly coming in well below expectations, any fresh signs of labor-market softness could materially erode expectations for a September rate hike.
