Fed hold expected in September 2026; zero cuts for year priced at 85¢
Fed rate path markets show a 72% probability of no rate change in September 2026 and an 85% chance of zero cuts for the entire year. Inflation expectations remain elevated, with CPI year-over-year above 3.3% priced at 64¢.
Key takeaways
- 01
Fed rate path markets show a 72% probability of no rate change in September 2026 and an 85% chance of zero cuts for the entire year.
- 02
Inflation expectations remain elevated, with CPI year-over-year above 3.3% priced at 64¢.
- 03
The Federal Reserve’s September 2026 meeting is a focal point, with the market price for a 0 bps hike at 72¢ (vol 111,282) and a 25 bps cut at just 1¢.
Full analysis
The Federal Reserve’s September 2026 meeting is a focal point, with the market price for a 0 bps hike at 72¢ (vol 111,282) and a 25 bps cut at just 1¢. This indicates strong expectation of a hold or slight tightening, but the low probability of a cut suggests markets are pricing in persistent inflation. The KXFEDDECISION-26SEP- series is the most liquid Fed contract, and the rate cut count market (KXRATECUTCOUNT-26DEC) shows 85¢ for zero cuts in 2026, reinforcing a no-easing scenario. Traders should watch upcoming CPI prints (KXCPIYOY-26AUG-T3.3) which trade at 64¢ for above 3.3%, implying sticky inflation.
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