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Fed's favored inflation gauge rose more than expected in July

Market expectations for a Federal Reserve interest rate hike on September 16 have risen above 60% after a Tuesday wholesale inflation report exceeded forecasts. Traders pushed the probability as high as 70% in morning action. This shift follows a period of volatility where Brent crude oil prices surpassed $100, adding to inflationary pressure. Stocks and bonds fell in response to these trends, while the Nikkei 225 closed down 126.55 points on September 9 as a stronger yen and oil prices weighed on exporters.

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What changed

The probability of a rate hike increased from roughly 60% to as high as 70% following a hotter-than-expected Producer Price Index report.

Live updates

  1. Fed rate hike odds climb following high wholesale inflation report

    Market expectations for a Federal Reserve interest rate hike on September 16 have risen above 60% after a Tuesday wholesale inflation report exceeded forecasts. Traders pushed the probability as high as 70% in morning action. This shift follows a period of volatility where Brent crude oil prices surpassed $100, adding to inflationary pressure. Stocks and bonds fell in response to these trends, while the Nikkei 225 closed down 126.55 points on September 9 as a stronger yen and oil prices weighed on exporters.

    Why it matters

    Chair Kevin Warsh faces a critical decision next week amid pressure from the Trump administration to avoid a hike. This follows strong August jobs data showing 162,000 nonfarm payroll additions. The Fed is balancing these labor gains against rising energy costs and inflation gauges.

    What is confirmed

    • The probability of a Federal Reserve rate hike at the September 16 meeting has climbed above 60%.
    • Brent crude oil prices pushed past $100.
    • The Nikkei 225 closed at 65,143 on September 9.

    Still unconfirmed

    • A 25-basis-point hike on September 16 could cause a 1% to 5% short-term decline in Bitcoin price.
    • Traders pushed rate increase chances to 70% in morning action.

    What to watch next

    • The August consumer price index report due Friday morning.
    • The Federal Open Market Committee decision on September 16.
    Sources used for this update (6)
    1. www.swissinfo.ch — Stocks and Bonds Fall as Brent Pushes Past $100: Markets Wrap
    2. newsonjapan.com — Tokyo Stocks Lose Ground as Exporters Face Stronger Yen
    3. finance.yahoo.com — What Happens to Bitcoin Price If the Fed Raises Interest Rates on Sept. 16?
    4. 247wallst.com — Fed Rate Hike Odds Rise to 61% After PPI Comes in Hotter than Expected
    5. www.cnbc.com — The likelihood of a Fed interest rate hike next week just got a lot higher
    6. finance.biggo.com — Fed Rate Hike Odds Jump Past 60% as Markets Brace for Sept. 16 Decision
    confidence 90%

  2. August CPI Report Set to Influence Federal Reserve Rate Decision

    Markets are awaiting the August consumer price index report due Friday morning to determine if the Federal Reserve will raise interest rates. This follows stronger than expected August jobs data, with the Bureau of Labor Statistics reporting 162,000 nonfarm payroll additions against a 53,000 consensus. While Governor Christopher Waller previously suggested he might support leaving rates unchanged, the Trump administration is now actively attempting to prevent a rate hike. Traders currently see a roughly 60% market-implied probability of a hike.

    Why it matters

    The Federal Reserve meets in ten days to decide on monetary policy. Strong employment numbers have increased the likelihood of a rate increase, which typically strengthens the dollar and pressures equities.

    What is confirmed

    • The August consumer price index report is scheduled for release Friday morning.
    • The Bureau of Labor Statistics reported 162,000 nonfarm payroll additions in August.

    Still unconfirmed

    • The August jobs consensus was 53,000.

    What to watch next

    • Friday morning release of the August CPI report
    • The Federal Reserve policy meeting in ten days
    Sources used for this update (6)
    1. english.kontan.co.id — Bond Yields Fall, Stocks Rally as Fed's Waller Comments Curb Rate Hike Bets
    2. www.cnbc.com — Trump turns up the heat on Warsh as Fed rate hike looms
    3. finance.biggo.com — Gold Holds Near $4,400 as Traders Weigh Mideast Risk Against Fed Hike Odds
    4. finance.biggo.com — Wall Street Braces for Pivotal CPI Report as Fed Rate Hike Odds Climb
    5. www.europesays.com — Wall Street Braces for Pivotal CPI Report as Fed Rate Hike Odds Climb — BigGo Finance
    6. www.abfjournal.com — Middle Market Debt Weekly: September Moves Back Toward a Hike
    confidence 90%

  3. Fed Rate Hike Bets Ease as Waller Signals Patience

    Stock futures showed little change after major averages broke a three-day losing streak as Treasury yields retreated from multiyear highs. Federal Reserve Governor Christopher Waller stated that an upcoming inflation report will largely determine his support for an interest rate hike later this month. Waller indicated he would weigh leaving interest rates unchanged, which helped curb rate hike expectations and eased market pressures. Following these comments, stock markets rallied, bond yields fell, and the Japanese yen strengthened against the US dollar.

    Why it matters

    Global financial markets recently faced heavy pressure as military clashes between the US and Iran drove up oil prices, stoking inflation fears and pushing Treasury yields toward multiyear highs. The resulting market turmoil included a steep drop in the Nikkei 225 on September 2 and broader declines across US stock indexes. Central bank policy remains sensitive to incoming price data as officials weigh further tightening.

    What is confirmed

    • Major indices posted gains on Wednesday as Treasury yields fell back off multiyear highs.
    • Federal Reserve governor Christopher Waller stated that an inflation report next week will largely determine whether he supports an interest rate hike later this month.
    • Waller said he would consider leaving interest rates unchanged at the Fed.
    • Stock markets rallied and bond yields fell as Fed Governor Waller signaled patience on interest rates.

    What to watch next

    • The release of the upcoming inflation report on September 11.
    • Federal Reserve decisions on interest rates at the central bank's upcoming meeting.
    Sources used for this update (4)
    1. www.cnbc.com — Stock futures are little changed after major averages snap three-day losing streaks: Live updates
    2. apnews.com — Fed’s Waller says central bank’s next rate move depends on upcoming inflation report
    3. finance.yahoo.com — Fed Governor Chris Waller Just Significantly Upped the Stakes for the Sept. 11 Inflation Report. It Could Decide Whether There is a Rate Hike at the Fed's Upcoming Meeting
    4. www.cnbctv18.com — Japan's Yen jumps against US dollar, bond yields fall as Fed's Waller comments curb rate hike bets
    confidence 100%

  4. Global stocks fall as oil prices surge and Fed rate hike bets rise

    Global stock indexes declined as military clashes between the US and Iran drove up oil prices, fueling inflation fears and bets on further Federal Reserve interest rate hikes. The Nikkei 225 plummeted 1,889 points on September 2, while US stock indexes slipped on Monday. Rising oil prices and hawkish Fed expectations pressured stocks.

    Why it matters

    The July core inflation rate of 3.3% exceeded expectations, prompting Federal Reserve Chair Kevin Warsh to suggest potential interest rate hikes. Despite a stable labor market, inflation remains above the 2% target. Recent military strikes and resulting oil price increases have intensified inflation concerns.

    What is confirmed

    • The Nikkei 225 closed at 64,325.64, down 1,889.70 points on September 2.
    • US stock indexes slipped on Monday after military clashes between the US and Iran drove up oil prices.
    • The 10-year Treasury yield hit its highest level since November 2023.
    • U.S. 10-year Treasury yields hit a 34-month high as Commerce Secretary signaled targeted chip tariffs.

    Still unconfirmed

    • Speculative gross short interest in crude oil sits near all-time highs.

    What to watch next

    • Federal Reserve interest rate decisions
    • US inflation data releases
    • Oil price movements
    Sources used for this update (5)
    1. www.koreatimes.co.kr — Wall St dips as rising oil prices, hawkish Fed bets pressure stocks
    2. newsonjapan.com — Nikkei Plunges 1,889 Points as Oil Shock and Bond Rout Hit Tokyo
    3. seekingalpha.com — Goehring & Rozencwajg Q2 2026 Natural Resource Market Commentary
    4. en.sedaily.com — Chip Tariff Threat Adds to Inflation Fears as Yields Near 5%
    5. finance.yahoo.com — Treasury yields hover near multi-year highs as energy prices and government debt fuel bond sell-off
    confidence 90%

  5. Fed Chair Warsh Signals Rate Hikes as Inflation Remains Elevated

    Federal Reserve Chair Kevin Warsh indicates interest rate hikes may be necessary after July data showed core prices rose 3.3% annually. This figure exceeded expectations and coincided with a slowdown in consumer spending. Warsh reaffirmed the central bank's commitment to price stability during the Jackson Hole conclave, noting that inflation still sits above the 2% target despite a stable labor market. Recent military strikes between the U.S. and Iran have further increased oil prices, intensifying inflation concerns and driving U.S. stock index futures lower.

    Why it matters

    The Federal Reserve uses core price data to determine if monetary policy is successfully curbing inflation. Persistent price increases often lead to higher interest rates to cool the economy. These decisions impact borrowing costs for consumers and corporate investment.

    What is confirmed

    • Federal Reserve Chair Kevin Warsh stated inflation exceeds the 2% target.
    • July data showed core prices rose 3.3% annually.
    • Kevin Warsh reaffirmed the central bank's commitment to price stability.

    Still unconfirmed

    • Bank of America predicts three rate hikes and continued inflation through 2028.
    • CEO Brian Moynihan maintains that a recession is not coming.
    • Military strikes between the U.S. and Iran drove up oil prices.

    What to watch next

    • Upcoming Federal Reserve interest rate decisions
    • New monthly inflation data reports
    • Developments in U.S.-Iran military clashes affecting oil prices
    Sources used for this update (4)
    1. apnews.com — America In Focus: key inflation gauge remains high; Fed’s Warsh signals rate hikes may be needed
    2. www.ntd.com — Wall Street Review: Stocks End Week Mixed Amid Strong Nvidia Earnings, Fed Clarity
    3. www.theglobeandmail.com — Stock Market News for Aug 31, 2026
    4. wsau.com — Wall St set for lower open as Middle East clashes revive rate-hike speculation
    confidence 90%

  6. Fed Chair Kevin Warsh Signals Rate Hikes at Jackson Hole

    Federal Reserve Chair Kevin Warsh signaled interest rate hikes during the central bank's annual Jackson Hole conclave. Warsh stated that inflation currently exceeds the Fed's 2% target, although the labor market remains stable. This shift follows July data showing core prices rose 3.3% annually, which surpassed expectations and slowed consumer spending. While Bank of America predicts three rate hikes and continued inflation through 2028, CEO Brian Moynihan maintains that a recession is not coming.

    Why it matters

    The Federal Reserve uses its preferred inflation gauge to determine whether to adjust interest rates to stabilize the economy. Higher rates are typically used to combat inflation by increasing borrowing costs. The Jackson Hole meeting serves as a primary venue for the Fed to communicate its monetary policy direction to global markets.

    What is confirmed

    • Fed Chair Kevin Warsh signaled rate hikes at the annual Jackson Hole conclave.
    • Warsh stated inflation tops the 2% target while the labor market remains stable.

    Still unconfirmed

    • Bank of America predicts three Federal Reserve rate hikes and inflation through 2028.
    • Bank of America CEO Brian Moynihan believes a recession is not coming.

    What to watch next

    • The Federal Reserve's official interest rate decision in September
    • Further reports on core price trends following the July 3.3% increase
    Sources used for this update (6)
    1. www.foxbusiness.com — Federal Reserve - Fox Business
    2. economictimes.indiatimes.com — Persistent systems Q4 results
    3. ca.finance.yahoo.com — Nucor Corporation NUE Stock Forecast & Price Target
    4. www.foxbusiness.com — Fox News
    5. apnews.com — All eyes on Fed Chair Warsh during the central bank’s annual conclave in Jackson Hole
    6. en.sedaily.com — Warsh Signals Rate Hike as Inflation Tops Fed Target
    confidence 90%

  7. Fed's favored inflation gauge rose more than expected in July

    The US inflation rate rose more than expected in July, with the Federal Reserve's preferred gauge showing core prices increased 3.3% annually. Consumer spending growth slowed as price pressures continued. This development may impact the Fed's decision on interest rates in September.

    Why it matters

    The inflation rate has significant implications for the Federal Reserve's monetary policy. The Fed has been closely monitoring inflation as it considers adjusting interest rates. A higher inflation rate may lead to increased borrowing costs, affecting consumers and businesses. The current inflation rate is above the Fed's target of 2%.

    What is confirmed

    • The Fed's preferred inflation gauge shows core prices rose 3.3% annually in July
    • Consumer spending growth slowed in July due to continuing price pressures
    • Inflation remains elevated as energy costs push on prices

    Still unconfirmed

    • Kevin Warsh may raise rates in September due to the latest inflation report

    What to watch next

    • Federal Reserve's decision on interest rates in September
    • August inflation rate
    • Consumer spending growth in upcoming months
    Sources used for this update (9)
    1. economictimes.indiatimes.com — Mahindra epc Q4 results
    2. Fox Business — Fed's favored inflation gauge rose more than expected in July
    3. CNBC — Fed’s preferred inflation gauge shows core prices rose 3.3% annually in July
    4. CNN — Consumers pulled back on spending in July in the face of continuing price pressures | CNN Business
    5. The New York Times — Inflation Remains Elevated as Energy Costs Push on Prices
    6. AP News — Key inflation gauge remains elevated during Iran war and ongoing US trade fights
    7. finance.yahoo.com — US Inflation Accelerates in July, Consumer Spending Growth Slows
    8. finance.yahoo.com — Fed's favored inflation gauge rose more than expected in July
    9. www.aol.com — Kevin Warsh Just Got Another Reason to Raise Rates in September
    confidence 75%