First Light News: Fed Decision in Focus

Markets are bracing for a high-impact schedule as oil stays above $100 and bond yields remain elevated, putting today’s Federal Reserve decision in focus. The UK releases its August CPI at 6 am GMT, followed by the Fed rate announcement at 6 pm. Ahead of the event, recent US August CPI largely matched expectations except for a modest rise in “MM core,” reinforcing more hawkish rate pricing. Short-term rate markets have nearly fully priced a 25-bp hike, while an OIS curve still shows about a 50% probability. A Reuters poll cited 86 of 101 economists expecting a hike. The Fed’s updated projections—the SEP—could drive volatility even more than the decision, especially if the 2026 rate path diverges from market expectations.