Strong August employment data showing 162,000 job gains and a steady 4.1% unemployment rate, alongside inflation readings remaining above the Fed’s 2% target with July CPI at 3.4% and core at 2.5%, have shifted trader sentiment toward a possible rate hike. The federal funds rate sits in the 3.50%-3.75% range after multiple holds, while new Chair Kevin Warsh’s hawkish Jackson Hole remarks and updated dot-plot projections from nine of 19 officials have lifted market-implied odds of a 25 basis point increase at the September 15-16 FOMC meeting to around 58-64% per CME FedWatch. Upcoming CPI and PPI releases on September 10-11 represent the final major catalysts before the decision, with resilient labor conditions and supply-driven price pressures forming the core drivers of current pricing.