Fed Heads Into Wednesday's Decision With a Hike Priced Near 83%

The Federal Open Market Committee meets Tuesday and Wednesday, with the rate decision due September 16 at 2:00 p.m. Eastern and a press conference to follow at 2:30. The current target range is 3.50% to 3.75%, held since December 2025. Market-implied odds of a 25-basis-point increase to 3.75% to 4.00% sit near 83%, a level reached after Chair Kevin Warsh's hawkish Jackson Hole remarks on August 28 and a solid August employment report.

The August consumer price index gave both camps material. Headline inflation ran 3.4% year over year with core at 2.5%, close to consensus and still well above the 2% objective, while softer July employment and retail sales data argue for patience. September is also one of the four meetings that carries a Summary of Economic Projections, so the dot plot will matter as much as the decision itself for anyone trying to read the path into 2027.

Rate-sensitive holdings carry the exposure here. Bank of America benefits from a wider spread environment but faces credit and deposit-cost questions if policy stays restrictive. Realty Income and Agree Realty, both net-lease REITs, trade against long yields that have been climbing alongside crude. Telecom names including AT&T and Verizon, held largely for yield, compete directly with a rising risk-free rate.