The latest US inflation data has prompted a sweeping shift among Wall Street forecasters and prediction-market traders toward a September Federal Reserve rate hike. August CPI rose 0.4% month over month, following 0.1% in July, and with oil prices near $100 a barrel, the case for tighter dollar conditions has strengthened.
According to aggregated bank forecasts, 16 of 20 institutions now expect the Fed’s next move to be a rate increase in September. Bank of America projects a September hike and a total of 75 basis points of tightening during 2026, while Deutsche Bank and RBC share that 75-basis-point full-year expectation. A larger group—Barclays, BNP Paribas, Citigroup, MPA Macro, MUFG, Nomura, Piper Sandler, Societe Generale, TD Securities, UBS, and Wells Fargo—expects a September increase and 50 basis points of total tightening. Goldman Sachs and JPMorgan also forecast a September hike but expect just 25 basis points for the year.
Not everyone agrees. HSBC expects rates to remain stable for an indefinite period and forecasts no change in 2026. Jefferies sees the first move as a 25-basis-point cut in December. Morgan Stanley and Oxford Economics expect no change in 2026 and the first cut in 2027.
Prediction-market pricing has moved in the same direction. Reports indicate Polymarket odds of a 25-basis-point Fed rate hike reached 81%, while the no-change outcome fell to 18%. These figures would mark a sharp break from late August, when CNBC reported Polymarket showed 49% odds of a September hike after the Jackson Hole speech. Reuters separately reported market-implied odds of a quarter-point hike had risen to about 85% after the inflation data, up from around 67% before. The FOMC’s next meeting is scheduled for September 15–16, 2026, and includes a Summary of Economic Projections.
The policy backdrop remains tight. On July 29, 2026, the FOMC maintained the federal funds target range at 3.50%–3.75% in a 9–3 vote, with dissenters Beth M. Hammack, Neel Kashkari, and Lorie K. Logan preferring a quarter-point increase.
For crypto markets, the shift matters because higher rates tend to strengthen the dollar and reduce appetite for risk assets. Bitcoin traded near $76,813, down about 0.7% over 24 hours, while the crypto Fear & Greed Index read 61, or “Greed.”
