Rate futures now price an 87% chance the Federal Reserve raises rates at its September 15–16 meeting, up sharply from the day before. Traders also now expect a longer run of hikes through 2027, while Bitcoin and Ether moved higher after the latest inflation data.
Economists Now See a September Hike
Rate futures now put the odds of a Fed rate hike next week at 87%. That is up from 72% a day earlier. The Fed currently holds its target rate at 3.50%–3.75%.
Before the shift, only 13 of 48 economists surveyed had expected a hike this month, as easing inflation and the approaching midterm elections pointed toward no change. But hotter data reversed that view: on a yearly basis, CPI rose 3.4%, matching expectations, while core CPI stood at 2.4%, also in line with forecasts.
As a result, chief economist Heather Long said a September hike is now almost locked in. Former Fed Vice Chair Richard Clarida echoed that view: According to Clarida, "If we get a hike next week, certainly we'll get additional ones." A hike next week would mark the first Fed rate increase in three years.
Markets Now Price Three Hikes Through 2027
Traders now see at least three rate hikes through June 2027, up from two previously, with a base case of four hikes by July 2027. That marks a reversal from early 2026, when markets were pricing in four rate cuts over the same period, and points to a higher-for-longer path as the Fed keeps fighting inflation.
Bitcoin Holds Near $77,500 Despite Higher-Rate Outlook
Higher interest rates typically make riskier assets less attractive, since investors can earn more from safer instruments such as government bonds. That dynamic can pull money away from Bitcoin, Ethereum, and other cryptocurrencies.
Yet Bitcoin and Ether moved higher after the inflation data, with Bitcoin briefly approaching $77,500 and Ether climbing above $2,511.
Source: Coinpedia Fintech News
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