The Consumer Price Index (CPI) preview suggests that upcoming data will align with market expectations, implying that the Federal Reserve may not increase interest rates. This assessment comes amid a backdrop of declining inflation, with the CPI having decreased from 4.2% in May to 3.5% in June 2026. The Federal Reserve has maintained its federal funds target range at 3.50%–3.75%, with recent projections indicating a divided stance among policymakers regarding future rate hikes. The current market pricing appears consistent with expectations that the Fed may hold rates steady, as indicated by a significant reduction in the likelihood of a rate hike by September 2026.
Key Takeaways
The CPI preview suggests data will be in line, which may indicate a decreased likelihood of a rate hike.
Market pricing for a September rate hike has dropped to 32% YES, down from 42% just 24 hours ago.
The October meeting’s rate hike probability also declined, now at 48.5% YES, reflecting adjusted expectations.
