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Central BanksMediumUpdated•Originally published 14 September 2026•Updated 14 September 2026•
2 min read

Fed Hike Odds Near 90% as Oil Jumps 3.3% After New Attacks

Key Facts

1Markets price a near-90% probability of a 25-basis-point U.S. rate increase on September 16, 2026.
2Brent rose 3.3% to $108.04 a barrel, while West Texas Intermediate (WTI) gained 3.5% to $103.54.
3The Fed meets on September 15-16, with the decision at 2:00 p.m. and press conference at 2:30 p.m. Eastern Time on September 16.

Markets raised the probability of a 25-basis-point Federal Reserve rate increase on Wednesday, September 16, 2026, to nearly 90%. Policymakers meet on September 15-16 amid a clear shift in expectations following the latest inflation data.

The repricing followed a 0.4% monthly rise in the U.S. Consumer Price Index (CPI) in August and a 3.4% annual increase. Core CPI, excluding food and energy, rose 0.3% on the month and 2.4% from a year earlier, while the energy component advanced 2.1% monthly.

The shift coincided with another oil surge after attacks on Saudi energy infrastructure and ships in the Middle East. Brent futures rose 3.3% to $108.04 a barrel, while West Texas Intermediate (WTI) gained 3.5% to $103.54 in Monday morning trade.

The Federal Open Market Committee (FOMC) held its target range at 3.50%-3.75% in July, although 3 members preferred a 25-basis-point increase. The meeting minutes also showed that inflation remained above the 2% objective and that supply shocks, including energy, were contributing to price pressure.

An oil shock feeds directly into headline inflation through fuel and transportation and can indirectly affect the production costs of goods and services. For the Fed, its monetary significance depends on persistence and whether it obstructs a return toward the 2% inflation objective, rather than on a single day's crude move.

Kevin Warsh has chaired the Federal Reserve Board and the Federal Open Market Committee (FOMC) since May 22, 2026. He will lead the September deliberations as policymakers weigh persistent underlying inflation against the risks from the new energy shock.

The rate decision is scheduled for 2:00 p.m. Eastern Time on September 16, followed by a press conference at 2:30 p.m. Investors will watch the committee's assessment of persistent energy pressure and whether any increase is presented as a one-off move or the start of a longer tightening path.