Traders Bet on Fed Hike Despite Central Bank's Own Cut Forecast

The Fed has held rates at 3.50%–3.75% for three meetings and forecasts one cut in 2026. Yet traders price a 38% chance of a hike at September's FOMC meeting. Inflation sits at 3.4% — above the 2% target — and tariff-driven cost pressures keep markets cautious. Savers' yields hold; borrowers see no relief.