CME FedWatch September Rate Hike Probability Surges to 61.4%

Market pricing for a 25bps Fed hike in September jumps to 61.4%, while 50bps hike odds vanish. Prediction markets on Kalshi and Polymarket reflect similar bullish sentiment on rate increases.

Woofun AI data shows that the CME FedWatch tool indicates a 61.4% probability of the Federal Reserve raising interest rates by 25 basis points on September 16, targeting a federal funds rate range of 3.75% to 4.00%. This figure represents an increase from 50.6% recorded one month ago. Conversely, the likelihood of a 50-basis-point hike has fallen to 0%, down from 25% a week prior, while the probability of a rate cut remains at 0%.

The Federal Open Market Committee voted 9-3 on July 29 to maintain the target range at 3.50% to 3.75%. Federal Reserve Chairman Kevin Warsh emphasized that the committee adheres strictly to a single 2% inflation target without implicit soft targets. In prediction markets, Kalshi traders assign a 53% probability to a 25bps hike with $1.36 million in volume, while Polymarket participants price in a 52% chance of a hike amid over $8 million in trading activity.