Before the Fed: The 85% Priced Hike, a 5% 10-Year, and What the Dot Plot Could Change This Week

Markets have spent close to six weeks talking themselves into a September hike, and as of Tuesday morning the trade was essentially done. Fed funds futures put a 25 basis point increase to the 3.75%-4.00% range at roughly 85% to 90%, up from 44.4% on August 7, near 60% on September 8, and into the mid-to-high 80s after the September 11 core CPI beat (CME FedWatch via financefeeds.com, September 15 2026). The range of 3.50%-3.75% has stood since December 2025, the terminal of a 1.75 percentage point easing cycle. A hike here would be the first tightening since that cycle ended.

The interesting part is not the ceremony of the decision itself. A fully priced 25 basis point move rarely moves a ma…