#每周来晒 #美联储会议 Countdown to the Rate-Hike Storm: The First FOMC Test Since Warsh Took Office, and the Market Battle with a 90% Probability

The FOMC opens this Wednesday, with the probability of a rate hike approaching 90% and Warsh facing a major credibility test.
In the early hours of September 17 Beijing time, the Federal Reserve will announce the decision from its September Federal Open Market Committee (FOMC) meeting. This is the first rate-setting meeting since Kevin Warsh took office as chair on May 22, and the first time since 2023 that the Fed may press the “rate-hike button.”
As of the September 12 close, the CME FedWatch tool showed that the market-implied probability of a 25-basis-point rate hike had surged from 59.4% a week earlier to a range of 87% to 91%, with a rate hike having virtually become a “foregone conclusion” consensus.
This week can aptly be called a “super central-bank week”—the Federal Reserve, Bank of Japan, and Bank of England will announce their rate decisions on the same day or in succession. But among all the variables, the Fed’s decision is undoubtedly the most important.

August CPI Seals the Deal: Core Monthly Growth Exceeds Expectations, Rate-Hike Consensus Takes Shape
On September 11 (Friday U.S. Eastern Time), the U.S. Department of Labor released August Consumer Price Index (CPI) data. Headline CPI rose 3.4% year over year, unchanged from July and in line with market expectations; it rose 0.4% month over month, a significant rebound from July’s 0.1%. The key figure was core CPI: it rose 0.3% month over month, exceeding the market expectation of 0.2%; year over year, it fell from July’s 2.5% to 2.4%.
On the surface, the year-over-year figure was declining, but the upside surprise in core monthly growth revealed the deeper persistence of inflation. Higher fuel prices were the main driver of the monthly jump, while core CPI growth exceeded expectations by 0.1 percentage point, indicating that services inflationary pressure has not materially subsided.
After the data were released, market pricing reacted swiftly. CME FedWatch showed the probability of a 25-basis-point September rate hike jumping from 72.4% before the release to a range of 86.5% to 91%. Major international investment banks including Goldman Sachs, JPMorgan, Citi, and Nomura collectively shifted their views: Goldman changed its forecast from “hold steady” to “a September rate hike”; JPMorgan expects one hike each in September and December; Citi proposed a path of “a September rate hike followed by rates remaining unchanged until a cut in June 2027.” The core logic behind the collective shift among investment banks is that—with the market having priced the probability of a rate hike at nearly 90%—if the Fed chooses to stand pat, it would trigger sharp market volatility, a situation the committee wants to avoid.

Warsh’s Credibility Test: Jackson Hole Commitment Faces Verification

Warsh’s speech at the Jackson Hole economic policy symposium on August 28 was the catalyst for the latest rise in rate-hike expectations. In his speech, he stated clearly that the Fed must be “100% certain” that inflation is falling toward the 2% target at a “clear and sufficiently rapid pace”; otherwise, “our work is not done.” He anchored the core of the current policy framework to the inflation trend rather than any single data point, emphasizing that “price stability does not achieve itself, and inflation may not mean-revert.”
These remarks directly broke the market’s wait-and-see mood. Before the Jackson Hole speech, the probability of a September rate hike was only 36%; by the close after the speech, it had risen to 58%. August nonfarm payrolls (+162,000, far exceeding the expected 56,000) and CPI data were subsequently released, sending the probability steadily higher to nearly 90%.
For Warsh, this meeting is not merely a policy choice but also a credibility test. Omar Sharif, founder of Inflation Insights, said bluntly: “You cannot give a speech like that and then fail to support a rate hike at the next meeting. Otherwise, you either have to back your words with action or become the ‘boy who cried wolf.’”
At the same time, political pressure is also mounting. Kevin Hassett, director of the White House National Economic Council, said on CNN on September 13 that he and Trump “both believe there is no reason to raise rates at present.” Trump himself reiterated during a visit to Ireland that U.S. interest rates should be the lowest in the world. The tension between politics and monetary policy makes Warsh’s first rate-setting meeting even more closely watched.

U.S. Treasury Yields Near the 5% Threshold, Global Assets Face Repricing
The rise in rate-hike expectations has been fully reflected in the bond market. At the September 12 close, the 10-year U.S. Treasury yield stood at 4.969%, touching 4.986% intraday and nearing the 5% threshold, the highest level since October 2023; the 2-year Treasury yield rose to 4.619%, reflecting market pricing for a near-term rate hike. The 30-year Treasury yield stood at 5.354%; although it edged down 1.84 basis points, the long end remained under sustained pressure.
The surge in Treasury yields is reshaping the logic of global asset pricing. The three major U.S. stock indexes all posted declines for the week—the Dow fell 1.57%, the S&P 500 fell 0.8%, and the Nasdaq fell 0.66%. On September 12, however, all three indexes rebounded by around 1% as falling oil prices provided a boost, ending a four-session losing streak.
Notably, the S&P 500 forward price-to-earnings ratio has fallen to 19 times, its lowest level since April 2025. This valuation compression reflects the market’s early absorption of the upward pressure on discount rates brought by rate hikes. Structurally, however, funds are not exiting indiscriminately: Dell Technologies surged 11.98% to a record high, the Philadelphia Semiconductor Index rose 1.81%, and the Magnificent Seven index gained 1.01%—even amid rate-hike expectations, the market is selectively pricing the AI narrative.

What to Watch After the Rate Hike: The Dot Plot and Statement Wording Matter More Than the Hike Itself
The market has fully priced in a September rate hike, but the real suspense lies in “what comes after the hike.” This FOMC meeting will update the Summary of Economic Projections and dot plot. CICC expects the Fed to lower its year-end unemployment forecast, raise its year-end inflation forecast, and keep the median dot-plot projection at 3.8%, while potentially raising interest-rate projections for the following two years.
A more hawkish scenario would be one in which the dot plot shows room for further rate hikes this year or next year, potentially prompting the market to reprice a rate-hike cycle that lasts longer and is larger in magnitude. UBS has broken ranks by forecasting two rate hikes before year-end. This remains a minority view on Wall Street, but the direction is worth watching.
For the market, the “landing of the rate-hike shoe” is not necessarily a bad thing.
Diverging expectations over the rate hike have left investors at a loss, while the “landing of the shoe” can consolidate consensus and usher in a new market trend. If the Fed frames the move as preventing inflation from rising again rather than initiating a prolonged rate-hike cycle, the market may view it as a “dovish hike,” thereby limiting further upward pressure on long-term Treasury yields.

Core conclusion: The September FOMC meeting will be Warsh’s first “live-fire exercise” since taking office, and a 25-basis-point rate hike has become the overwhelming market consensus. Investors should shift their focus from “whether to hike” to “what the Fed says after the hike”—the statement wording, dissenting votes, and dot-plot signals will determine the market’s direction in the next phase.