Overview
- After Friday's August CPI showed headline inflation at 3.4% year‑over‑year and monthly CPI up 0.4%, futures and the CME FedWatch tool moved to roughly an 80%–87% probability of a 25 basis point hike at the Sept. 15–16 FOMC meeting.
- Brent crude topping $100 per barrel following Middle East supply disruptions has lifted energy costs and fed headline inflation, complicating the Fed's decision because energy is largely outside monetary policy control.
- Major banks and some analysts including Goldman Sachs, TD and BMO revised forecasts toward at least one near‑term hike and in some cases multiple hikes after the CPI and oil moves.
- Markets have repriced risk across assets with the 10‑year Treasury yield pushing toward 5% and pressure on stocks, crypto and rate‑sensitive borrowers as mortgage and loan costs rise.
- The Fed will announce its decision, updated projections and hold a press conference on Sept. 16, and investors will watch whether officials treat a September hike as a one‑off response to supply shocks or the start of a broader tightening path.