Fed pause probability slips to 67% through September

The market-implied probability that the Federal Reserve will keep interest rates unchanged through September has slipped to 67% from a higher level a week earlier, according to newer pricing. CME FedWatch had previously put the September probability of unchanged rates at 59.0% on Aug. 24, with a 41.0% probability of a cumulative 25-basis-point hike. For October, CME FedWatch showed a 46.6% probability of unchanged rates, a 44.8% probability of a cumulative 25-basis-point hike and an 8.6% probability of a cumulative 50-basis-point hike. Austin, a commentator, said higher rates could prompt the U.S. government to reinvest more funds in short-term debt, potentially directing additional liquidity into the private sector. As of late August 2026, short-term Treasury bill yields were in the mid-3% range, while longer-term yields reached the mid-5% range. Investors are watching Federal Reserve officials, Kevin Warsh's upcoming speech at Jackson Hole, unemployment data and CPI data for signals about future monetary policy.

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