The September FOMC Is 92.5% Priced In for a Hike. The Dot Plot and Warsh's Presser Are What Actually Matter

The September decision is a 25 basis point hike to a 375-400 basis point range with 92.5% probability in fed-funds futures, but the rate move is no longer the event. The event is the What to Watch: September FOMC Decision preview, which flagged exactly this: the dot plot Chair Kevin Warsh carries into the 2:30 p.m. press conference, because it will tell markets whether today is a one-and-done, a resumption of a sustained tightening path, or something closer to a hold dressed in a hike.

Key Takeaways CME FedWatch prices a 25 bp hike to 375-400 bp at 92.5%, with 7.5% for a hold at 350-375 bp. August headline CPI reaccelerated to 3.4% y/y on a gasoline-led 0.4% m/m, while core cooled to 2.4% y/y…