The probability of a Fed rate hike in September has risen to about 82%, and the market changed overnight.

The CME FedWatch tool shows that traders’ bets on a rate hike at the September policy meeting jumped from less than 53% a week ago to 82%. Brent crude broke above $100 per barrel, and with initial jobless claims falling to 187k—the lowest since 1969—warnings of an inflation rebound are becoming increasingly pungent.

The “oil price—inflation—rate hikes” chain is back in motion, and risk assets are hit first. U.S. stock indexes came under pressure; the SPY ETF tracking the S&P 500 weakened as the broader market fluctuated. Meanwhile, the yield on the 2-year U.S. Treasury note, which is highly linked to Fed rate expectations, briefly surged to 4.370%. The 10-year yield, the “anchor of global asset pricing,” topped out at 4.714%, with both reaching new highs since early 2025. In hawkish expectations, Nasdaq-100 futures NQ repeatedly sold off, and the valuation anchor for technology stocks was continuously loosened.

Cryptocurrencies are also not escaping the blow. Bitcoin BTC fell below the 200-week moving average. Analysts warn that if inflation data continues to run hot, expectations for further rate hikes will add more pressure on Bitcoin; support below is seen in the $54,000—$54,900 range.

France’s trade bank still sticks to its view of an “extension of the pause,” believing that wage and housing inflation will cool over the next few quarters. But the market clearly seems more willing to believe the story told by oil prices. Keeping the policy rate unchanged at 3.50%—3.75% at next week’s July meeting remains the mainstream view; the true storm eye is in September—investors may want to be patient, because sometimes not buying is the best strategy.