Ben chabot(@chabot_ben):Market reads the Chair's speech as hawkish. Fed Fund futures odds of a September hike moved from 35% -> 57%. More importantly the futures markets are now pricing in multiple hikes by year end. The futures implied probability of two or more rate hikes by year end increased from 29% -> 48%. Remember these are odds implied by future market prices (CME FF tool). Because of risk aversion market implied odds of rate hikes are greater than the actual probability (explained in the blog linked in the tweet below). That said, the increase in these probabilities tell use investors have increased their likelihood of odds and/or are more worried about loses they will suffer should rates increase more than expected.

2026.08.28 14:49

Market reads the Chair's speech as hawkish. Fed Fund futures odds of a September hike moved from 35% -> 57%. More importantly the futures markets are now pricing in multiple hikes by year end. The futures implied probability of two or more rate hikes by year end increased from 29% -> 48%. Remember these are odds implied by future market prices (CME FF tool). Because of risk aversion market implied odds of rate hikes are greater than the actual probability (explained in the blog linked in the tweet below). That said, the increase in these probabilities tell use investors have increased their likelihood of odds and/or are more worried about loses they will suffer should rates increase more than expected.

Ben chabot@chabot_ben

2026.07.29 14:38

The market is unusually uncertain about today's FOMC decision. My thoughts about what derivative markets are telling us about the path of interest rates...