The market is nearly fully pricing in expectations of a Fed rate hike before September.

Trump publicly stated that the United States should have the lowest interest rates in the world, and once again threatened to cut off trade with countries running trade deficits with the U.S. in order to pressure the Federal Reserve. However, the U.S. August CPI exceeded expectations, and the market currently prices the probability of a rate hike in September at 86%. Fed Chairman Waller faces completely opposite pressure—to raise rates. The U.S.-Iran war has persisted for seven months, and rising energy prices combined with tariff policies have created a complex situation for the Federal Reserve’s inflation target.