Persistent inflation remains the dominant force shaping trader sentiment around Federal Reserve rate cuts, with August 2026 CPI rising 0.4 percent month-over-month and 3.4 percent year-over-year while core CPI held at 2.4 percent. Energy prices, driven by geopolitical supply shocks, have kept headline readings elevated well above the 2 percent target, prompting markets to price an 87-92 percent probability of a 25-basis-point hike at the September 15-16 FOMC meeting rather than any easing. The federal funds rate sits at 3.50-3.75 percent, and recent communications from Chair Kevin Warsh have reinforced a patient, data-dependent stance with no near-term cuts signaled. Key upcoming releases include September CPI on October 14 and the next FOMC meeting, where revised dot-plot projections could further clarify the path for monetary policy.

Sep 15 2026

Fed rate cut probability remains near zero ahead of September meeting

September Meeting dips to 0%1%

As of mid-September 2026, market prices for a Fed rate cut at the September meeting have fallen to near zero, reflecting the Fed's consistent hold on rates and cautious approach amid ongoing economic uncertainty and inflation concerns.

Sep 14 2026

Fed Chair Kevin Warsh Signals Inflation May Require More Rate Hikes

December Meeting dips to 5%2%

In his first major speech as Fed Chair at the Jackson Hole symposium, Kevin Warsh emphasized that inflation remains too high and that the Fed may need to raise rates further if inflation does not show sustained improvement. This hawkish stance increased market expectations for a September rate hike.

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