Markets are still trying to figure out the Fed’s next move | CNN Business

New York —

Will the Federal Reserve raise interest rates or hold them steady at its meeting next month?

For the market, it’s a coin flip: Odds of a rate hike in September are near 50%, while odds of keeping rates steady are near 50%, according to CME FedWatch, a real-time forecasting tool.

Volatile job numbers, stubborn inflation and changes to the Fed’s communications style are all stirring up uncertainty in markets and raising the stakes for upcoming economic data releases — including this week’s inflation report.

Traders are looking to Consumer Price Index data on Wednesday for more guidance on whether inflation is cooling or remaining sticky. The surge in energy prices because of the war with Iran has raised expectations for higher Fed rates by year-end, but the market remains divided on the timing of any rate hikes, while new data continues to shift bets.