Elevated inflation pressures, reinforced by energy price spikes tied to geopolitical tensions, represent the dominant driver behind current market-implied odds for a potential 25-basis-point federal funds rate hike at the September 15-16 FOMC meeting. The policy rate has remained anchored in the 3.50%-3.75% range since late 2025, with the July decision drawing three dissents favoring an immediate increase. Recent projections from Fed officials show a median endpoint of 3.8% by year-end, reflecting nine participants anticipating at least one hike amid core PCE forecasts revised higher to around 3.3%. Trader consensus, as reflected in futures pricing and prediction markets, assigns roughly even to moderately elevated probabilities to a September move, with incoming August inflation and employment data serving as key swing factors ahead of the decision. The September meeting will also feature updated economic projections and Chair Kevin Warsh’s post-meeting press conference.