Key facts
- Short-term interest-rate futures indicate a greater likelihood of a Federal Reserve rate hike by September.
- Market expectations have shifted towards a tightening of monetary policy rather than a pause.
- The Federal Reserve recently maintained its policy rate but projected a potential hike by the end of 2026.
Short-term U.S. interest-rate futures are now pricing in a greater chance that the Federal Reserve will deliver a rate hike by September, rather than keeping rates at their current level. This shift in market-based rate-path expectations follows the Fed's recent decision to hold rates steady, though a significant portion of policymakers anticipate a hike by the end of 2026 to combat inflation.