CME sees 92.7% chance of 25-basis-point Fed hike in September

  • Federal Reserve markets price a September interest-rate increase of 25 basis points.
  • 92.7% is the implied probability, with the target range potentially reaching 3.75%-4.00%.
  • The S&P 500 fell six weeks after five of seven initial hikes since 1988.

CME FedWatch data show a 92.7% probability that the Federal Reserve will raise interest rates by 25 basis points at its September meeting, potentially lifting the target range to 3.75%-4.00%. Axel Adler Jr. said seven initial rate hikes since 1988 were followed by S&P 500 declines six weeks later in five cases, with an average loss of 2.83%. Markets have largely priced in the expected hike, but signals of faster increases or a longer period of elevated rates could add pressure to U.S. stocks and Bitcoin.

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