Probability of a Fed Hit 87% Day Before Decision: Sept. 15, 2026

On Tuesday, the US Federal Reserve was expected to hike its key interest rate during its meeting the following day. It would be the first increase in over three years, as the Middle East conflict has lifted inflationary pressures far above the central bank’s 2% target. Investors earlier this month were on the fence about an increase, but a blockbuster nonfarm payrolls print and a stronger-than-projected Producer Price Index topped off with a hotter-than-expected Core Consumer Price Index result meaningfully strengthened the case for a lift. Indeed, on Tuesday, it appeared that buoyant hiring and elevated cost forces were likely to force the monetary policy institution’s hand, a few short weeks after reporters were asking in the post-decision July presser what the committee was waiting for to heighten its benchmark yield. Probabilities had taken a dramatic turn since late August, when odds of a raise stood at just 30% prior to the trio of fiery publications that pushed the chance of a Fed hike to 87%, according to the Interactive Brokers Prediction Markets as of Tuesday Morning.

US Retail Sales Recovery Was Expected

Retail sales on Tuesday were expected to recover from their steepest decline in over one year in July. Indeed, the -0.6% month-over-month contraction reported in the previous print was expected to reverse to a 0.8% gain in August’s update, according to the monthly Reuters poll of 53 forecasters. But the distribution of anticipated outcomes as of Tuesday was particularly wide for the following day’s release, with the minimum and maximum projections standing at 0.2% and 1.1%. The broad range can be explained by the fact that this indicator has an elevated deviation rate, which points to its outsized potential to vary from the consensus more often and in a sharper manner than the most other gauges. The Interactive Brokers Prediction Markets, meanwhile, priced the “Yes” contracts with thresholds of -0.5%, 0% and 0.5% at $0.91, $0.83 and $0.57 on Tuesday.

Source for images: Interactive Brokers Prediction Markets.

Note: Prices are highest bids as of the morning of September 15, 2026. 

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