Fed Sees No Rate Cut Before Q2 2027 as September Hike Odds Hit 68.8%
Updated
Updated · Forbes · Jul 9
Fed Sees No Rate Cut Before Q2 2027 as September Hike Odds Hit 68.8%
3 articles · Updated · Forbes · Jul 9
Summary
June Fed minutes showed officials expect rates to stay at 3.5%-3.75% until at least Q2 2027, even though the committee unanimously held policy steady last month.
A renewed Middle East conflict and stubborn inflation drove that stance, with Trump saying a peace deal with Iran was over and Brent crude briefly climbing back above $80.
CME FedWatch put the implied chance of a September rate hike at 68.8% on Wednesday, up from 62% a day earlier, while December hike odds rose to 85.3%.
The minutes also exposed a split Fed: a few officials saw a case for hiking, others viewed policy as too restrictive, and many participants still disagreed on where rates end 2026.
Inflation data have kept pressure on policymakers, with core PCE at 3.4% in May and core CPI at 4.2% as gas prices surged 59% from a year earlier.