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FedWatch Shows 55.7% Odds of September Rate Hike

8/28/2026

42 10 Full Breakdown

Summary

Story summary

Fed Chairman Kevin Warsh warned the Federal Reserve (Fed) must act if inflation misses its 2% target.
CME Group’s FedWatch raised the implied probability of a 25-basis-point September hike to 55.7%.
Two-year Treasury yields jumped to about 4.31%, their highest level since late July.
Warsh rejected forward guidance, saying the Fed will not provide explicit reaction functions to markets.

History

Historical Context

Paul Volcker became Fed Chairman in August 1979 to fight double-digit inflation that peaked at 14.8% in March 1980. His aggressive hikes—raising the federal funds rate from 11% to 12% on October 6, 1979 and to 20% by June 1981—dropped inflation below 3% by 1983. Today, Fed chair Kevin Warsh warns the Fed must act if inflation misses its 2% target, echoing Volcker’s approach.

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Story summary

Fed Chairman Kevin Warsh warned the Federal Reserve (Fed) must act if inflation misses its 2% target.
CME Group’s FedWatch raised the implied probability of a 25-basis-point September hike to 55.7%.
Two-year Treasury yields jumped to about 4.31%, their highest level since late July.
Warsh rejected forward guidance, saying the Fed will not provide explicit reaction functions to markets.

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