Will the Fed raise the rate following the meeting on September 16, 2026?

VangAI analysis

VangAI estimate: -19% for “No”, confidence 80%

• Recent inflation data shows a 0.4% increase in August, raising the likelihood of a rate hike.
• Fed funds futures markets price in a 69% chance of a September rate hike.
• Strong August employment data with 162,000 jobs added strengthens the case for a rate hike.
• Fed Chair Kevin Warsh emphasized the need for rate hikes to combat inflation.

The market has overestimated the likelihood of a rate hike, akin to betting on a horse with lower odds of winning.