Overview
- As of September 12, prediction markets and futures show roughly an 80 to 86 percent probability that the Fed will raise rates 25 basis points at the September 15–16 FOMC meeting, with Polymarket near 83 percent and CME FedWatch around 85–86 percent.
- The immediate trigger for the rapid repricing was August’s core consumer price index, which rose 0.3 percent month over month and exceeded the 0.2 percent consensus.
- BNP Paribas economist Mateos y Lago publicly suggested the U.S. may need three rate hikes starting as soon as the next meeting, and reporting in the Wall Street Journal shows markets now expect several additional hikes by mid‑2026; these comments are being treated as forecasts not Fed decisions.
- A 25 basis‑point move would lift the federal funds target range to 3.75 percent–4.00 percent and is expected to tighten dollar liquidity, push the dollar higher, and raise the opportunity cost of holding non‑yielding assets such as cryptocurrencies.
- Traders have increased positions on prediction platforms and volumes have spiked, and attention will shift to the FOMC’s Summary of Economic Projections and Chair Powell’s press conference for guidance on how many further hikes markets should expect.