The CME FedWatch Tool estimated a 57.6% chance of a quarter-point Fed hike to 4.00%-4.25% on Oct. 28 as of Sept. 18, up from 6.6% on Aug. 19. The FOMC had raised its target range to 3.75%-4.00% on Sept. 16.
The article attributes some inflation to Trump administration tariffs announced in July, ranging from 10% to 12.5% on imports from more than 80 countries. It calls the Iran war a larger current driver: after U.S. military action began on Feb. 28, Iran shut the Strait of Hormuz to virtually all commercial traffic, halting the flow of about one-fifth of the world’s crude oil. Diesel prices reached a record high the week before publication.
The article also points to the AI data-center build-out, saying shortages of graphics processors and memory have driven up chip prices and contributed to higher consumer prices. Meanwhile, 10- and 30-year Treasury yields reached 19-year highs; the article interprets this as bond traders signaling a need for further Fed action amid elevated inflation and U.S. debt above $40 trillion.