September Fed Rate Hike Odds Fall to 30.4% as Hold Leads
Bablu Singh Nirwan
September Fed Rate Hike Odds Slip as Traders Favor a Hold
Markets are increasingly betting the Federal Reserve's news will leave interest rates unchanged at its next meeting.
The latest September Fed rate hike odds, based on CME FedWatch data, show a hike is now the less likely outcome heading into the Fed's Sep 16, 2026, decision.
Where September Fed Rate Hike Odds Stand Right Now
The Fed's current target rates range is 350–375 basis points. According to CME FedWatch probabilities for the Sep 16 meeting:
69.6% probability the federal holds rates at 350–375 bps
30.4% probability the federal raises rates to 375–400 bps
Source: FedWatch Tool
That puts September Fed rate hike odds at just above 30%, meaning traders are pricing in roughly a two-in-three chance of no change at all.
What the Fed's Last Meeting Actually Decided
The current target range traces directly back to the Fed's most recent policy decision. On July 29, 2026, the Federal Open Market Committee voted 9-3 to hold the federal funds rates at 350–375 basis points, according to the Fed's official statement.
Three members, Beth M. Hammack, Neel Kashkari, and Lorie K. Logan, dissented in favor of raising the target range by a quarter point instead, a notably hawkish split for a single meeting.
In its statement, the committee said the economy continued to expand at a solid pace, job gains had kept pace with the workforce, and inflation remained elevated relative to its 2 percent goal, partly reflecting supply shocks in sectors including energy.
That backdrop, a resilient economy paired with above-target inflation, is part of why the committee stayed divided, and it's the same tension now shaping September Fed rate hike odds for the next FOMC meeting.
Why the Odds Have Been Sliding
CME FedWatch calculates these probabilities from 30-Day Fed-Funds futures prices, which shift constantly as new economic data comes in.
A softer jobs report or a cooler-than-expected inflation reading typically pulls hike odds down, since it gives the Fed-less justification to tighten policy further. Stronger data can just as easily push the odds back up.
That sensitivity is exactly why the current 30.4% figure is a snapshot, not a fixed forecast.
With the Sep 16 meeting still roughly a month away, it can move again well before the vote takes place.
What a Hold Would Signal
A hold at 350–375 bps, currently the more likely path based on September Fed-rate hike's odd, would suggest the Fed's want more data before committing to another move.
Given that three members already voted for in July, a hold in Sep would mean that hawkish minority failed to grow into a majority.
What a Hike Would Signal
A move to 375–400 bps remains possible at roughly 30% and would point to the Fed's prioritizing inflation control over growth concerns.
Rate hikes tend to move markets fast, since they immediately raise the cost of borrowing across the economy, from mortgages to corporate debt.
What Could Move the Numbers Before September 16
A few releases typically swing September Fed-rate hikes odd the most in the weeks before a Fed decision:
Monthly CPI and PCE inflation data
Nonfarm payrolls and broader labor market reports
Fed's officia public remarks before the pre-meeting blackout period
Treasury yield moves, which often price in expectations ahead of futures markets
Any of these could shift the current 69.6%/30.4% split meaningfully in either direction before the Sep 16 vote.
What Comes Next
With just over a month remaining before the Fed's September 16, 2026, meeting, CME FedWatch data currently puts a hold as the market's base case.
While September Fed rate hike odds keep the hike's as a real but secondary possibility near 30%, the committee's next decision will show whether the three dissenting members gain support or whether the majority holds steady again.
As with all pre-meeting probability data, these figures are expected to keep moving as Fed rate cut expectations and fresh economic releases shape market sentiment before the vote.
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