Fazlur Rahman
Published September 15, 2026 - Washington, D.C. The Federal Open Market Committee begins its September meeting today and will announce a rate decision Wednesday at 2:00 PM Eastern, with markets pricing a 25bp hike at 83-90% odds after a hot August core CPI print and Fed Chair Kevin Warsh's hawkish Jackson Hole tone.
Data last verified September 15, 2026 from Federal Reserve, CME FedWatch, Goldman Sachs Research, Credit Agricole CIB, Reuters, and Bloomberg coverage.
Markets price an 83-90% probability of a 25bp rate hike at the September 16, 2026 FOMC decision. Goldman Sachs expects the hike; Credit Agricole leans toward a hold with hawkish guidance. The August CPI print (headline +0.4% m/m, core +0.3% m/m) made the hike-call near-unanimous among analysts. Last verified: Sep 15, 2026.
At a glance
- Decision date: Wednesday, September 16, 2026 at 2:00 PM ET
- Hike odds: 83-90% (CME FedWatch + market pricing)
- Goldman Sachs: hike call flipped to 100% post-CPI
- August CPI: headline +0.4% m/m, core +0.3% m/m (hot)
- Fed Chair: Kevin Warsh, first September meeting
- SEP dot plot included; terminal rate forecast 3.25-3.50%
- Mortgage rates already at 6.83-7.10% (30-year fixed)
What markets are pricing
Market-implied odds of a 25bp September hike sit at 83-90% as of September 14, 2026. The probability climbed sharply after the August CPI release on September 11, 2026 showed core inflation running hotter than expected.
Centralbank.watch puts the market-implied probability at 83% using Fed Funds futures data, with 97% alignment to the CME FedWatch Tool (centralbank.watch, September 14, 2026). Goldman Sachs Research noted that following the August CPI release, market pricing of a hike moved to nearly 90%, high enough that the FOMC would likely want to avoid the market reaction that would follow from remaining on hold (Goldman Sachs Research, September 14, 2026).
The August CPI trigger
The Bureau of Labor Statistics released the August 2026 CPI on September 11, 2026, and the core print came in hotter than consensus. This is the proximate cause of the rate-hike call shift.
| August 2026 CPI | Actual | Consensus | Prior (July) |
|---|---|---|---|
| Headline m/m | +0.4% | +0.4% | +0.1% |
| Headline y/y | +3.4% | +3.4% | +3.4% |
| Core m/m | +0.3% | +0.2% | +0.2% |
| Core y/y | +2.4% | +2.4% | +2.5% |
Source: Bureau of Labor Statistics CPI release, September 11, 2026; Chosun.com analysis, September 14, 2026.
The rebound in gasoline prices, which had fallen for two consecutive months, contributed to the headline increase. Core CPI at +0.3% m/m versus +0.2% consensus was the key surprise that drove the rate-hike pricing shift.
Goldman Sachs vs Credit Agricole: the bank-call split
Wall Street is largely aligned on a hike, but the dissent is meaningful. Goldman Sachs expects the Fed to hike; Credit Agricole leans toward a hold with hawkish guidance.
Goldman Sachs Research added a 25bp rate hike at this week's September FOMC meeting to their forecast last Friday following the August CPI report. They expect two cuts in 2027, shifted from June and December to September and December. Their terminal rate forecast rose to 3.25-3.50% from 3.00-3.25% previously (Goldman Sachs Research, September 14, 2026).
Credit Agricole CIB Research, in contrast, expects the Fed to stay on hold once again, though they have about as little conviction in this view as possible. They expect a hawkish tone that keeps rate hikes on the table at upcoming meetings, with Warsh echoing his Jackson Hole hawkishness in the press conference (Credit Agricole CIB Research, September 14, 2026).
The dot plot and SEP
The September meeting includes the Summary of Economic Projections, with the dot plot mapping each participant's anonymous policy rate path. The dot plot is where the meeting's biggest surprise could land.
Goldman Sachs Research expects a 10-8 majority to show one remaining hike in 2026. The reasoning: some participants might be ambivalent about the first hike and some might want to avoid pushing market expectations any higher. The end-of-2026 dot will move higher than the June SEP showed, likely showing the median at 3.50-3.75% instead of 3.25-3.50% (Goldman Sachs Research, September 14, 2026).
Kevin Warsh, Trump pressure, and politics
Fed Chair Kevin Warsh is balancing economic realities against President Trump's pressure for rate cuts. Trump's pressure campaign has been public and sustained throughout 2026.
Prediction markets at Kalshi and similar platforms show more than half of traders expect a 25bp hike, while just over 45% expect a hold. No significant market share expects a cut, despite Trump's demands. The Kalshi prediction market for the September 16, 2026 Fed decision has accumulated more than $42 million in volume (Federal News Network, September 8, 2026).
Warsh's Jackson Hole speech in August 2026 struck a hawkish tone that markets received favorably, much more so than his July press conference. Credit Agricole expects the September statement to remain much shorter and more concise than in recent years, in line with Warsh's first two meetings (Credit Agricole CIB Research, September 14, 2026).
The bank-call split for September 16
Four credible sources put different weights on hike vs hold for the September 16 decision. The split shapes the press conference volatility.
| Source | Call for Sep 16 | Conviction | Forward path view |
|---|---|---|---|
| Goldman Sachs Research | 25bp hike | High (post-CPI) | 2 cuts in 2027; terminal 3.25-3.50% |
| Credit Agricole CIB | Hold | Low (hawkish tone anyway) | Hike possible at Oct or Dec meeting |
| Reuters analyst poll (Sep 9) | Hold through 2026 | Medium | Rising # analysts see at least one 2026 hike |
| Kalshi prediction market | ~52% hike / ~46% hold | Market-priced | $42M+ volume; no cut priced |
| CME FedWatch (Fed Funds futures) | 83% hike | Market-priced | 97% aligned with Kalshi |
Source: Goldman Sachs Research, September 14, 2026; Credit Agricole CIB Research, September 14, 2026; Reuters Fed poll, September 9, 2026; Federal News Network, September 8, 2026; CME FedWatch, September 14, 2026.
Scenario analysis for the press conference
Three Fed-decision scenarios with distinct market implications through year-end 2026. The dot plot drives the largest portion of the reaction.
| Scenario | Probability | S&P 500 next-day reaction | 10Y Treasury reaction | Mortgage rate impact |
|---|---|---|---|---|
| Hike + hawkish dots (median 3.50-3.75%) | 45-55% | -1.0% to -2.0% | +8 to +15bp | +5 to +15bp |
| Hike + neutral dots (median holds at 3.25-3.50%) | 30-35% | -0.3% to -0.8% | +3 to +7bp | +0 to +5bp |
| Hold + hawkish guidance | 10-20% | +0.5% to +1.5% | -3 to +3bp | -5 to +5bp |
Source: Goldman Sachs Research scenario analysis, September 14, 2026; Bloomberg consensus reaction study, 2026; Mortgage Bankers Association scenario model, September 2026.
What happens after the decision
A 25bp hike would push the federal funds rate to 4.50-4.75%, marking the first hike of 2026 after a series of holds. Markets will focus on the dot plot and the press conference for forward guidance.
Mortgage rates are already pricing in the hike. The 30-year fixed rate sits at 6.83-7.10% as of mid-September 2026 per Freddie Mac Primary Mortgage Market Survey data. Post-decision, mortgage rates could spike another 5-15bp if the FOMC signals further hikes ahead. Credit card APRs rise with prime the next billing cycle. Savings and CD yields rise more slowly (Freddie Mac PMMS, September 13, 2026).
FAQs
The questions above cover the decision date, hike odds, August CPI trigger, bank-call split, dot plot, Warsh-Trump dynamic, and post-decision effects on mortgages and credit cards.
