Fed September Hike Odds Jump to 90% After Inline CPI; EUR/USD Breaks 1.16
US August inflation matched expectations, but markets now price a ~90% probability of a Fed rate hike in mid-September, up from ~60% a week ago. The shift reflects hawkish Fed communication and resilient data, pushing EUR/USD below 1.16. The move signals a clear tightening bias, with implications for global risk assets and dollar strength.
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Fed Rate Hike Imminent Amidst Political Pressure on Chair Warsh
Markets are pricing a ~90% probability of a Federal Reserve rate hike in mid-September, the first since July 2023, driven by persistent inflation and hawkish Fed communication. This move is occurring amidst significant political pressure from President Trump and Treasury Secretary Bessent on Fed Chair Kevin Warsh, testing the central bank's independence. The exact magnitude and certainty of the hike remain unclear, as does Warsh's response to political influence.