The Fed decides Wednesday amid oil tensions and inflation still above 2%
The FOMC meets on September 15 and 16: markets assign an 85.5% probability to a 25-basis-point hike. In the background, Saudi Arabia halted the East-West pipeline after a drone attack and Brent returned to near 100 dollars.
The Federal Open Market Committee meets on September 15 and 16, 2026, with the decision and press conference on Wednesday, September 16. The target range for the federal funds rate today is 3.50%-3.75%, unchanged since December 2025. This is the third meeting chaired by Kevin Warsh.
Markets are not pricing in a hold. According to CME FedWatch, as of September 12 the implied probability of a 25-basis-point hike — which would bring the range to 3.75%-4.00% — was 85.5%.
| Element | Data |
|---|---|
| Current fed funds range | 3.50%-3.75% |
| Unchanged since | December 2025 |
| Probability of hike (CME FedWatch, September 12) | 85.5% |
| July 29, 2026 vote | 9 to 3 to hold |
| Decision and press conference | September 16 |
The July dissent as a clue
On July 29 the committee had voted 9 to 3 to leave rates unchanged, with three dissents in favor of a 25-basis-point hike. Three dissenting votes out of twelve do not make a majority, but they indicate that part of the committee already considered waiting insufficient. Between July and today, price data has been added to the picture: the August CPI, released on September 11, showed inflation still above the 2% target.
The meeting also produces the Summary of Economic Projections, the document with the committee members’ updated forecasts on growth, unemployment, inflation and the rate trajectory. At a turning point in the cycle like this one, those projections carry as much weight as the decision itself: they show whether Wednesday’s hike is considered a one-off episode or the start of a sequence.
The factor the Fed does not control
The external variable comes from the Gulf. On September 12, Saudi Arabia halted the East-West pipeline following drone attacks in the Riyadh and Medina regions. The Saudi Foreign Ministry reported damage and several people injured, without disclosing who was behind the attack. A few days earlier, on September 8, Houthi attacks had caused 73 injuries according to Saudi authorities, and Brent had touched 99.46 dollars a barrel — about 85 euros — its highest level since July 24.
A central bank can raise rates against demand-driven inflation; it cannot reopen a pipeline.
This is the point that makes Wednesday’s meeting less straightforward than the 85.5% implied probability suggests. A rise in crude oil prices caused by a supply disruption pushes up consumer prices while simultaneously slowing economic activity: it acts on the two sides of the Fed’s mandate in opposite directions. The projections released on the 16th will show how the committee factors in this element, or whether it chooses to treat it as temporary.
What we don’t know
We do not know how long the East-West pipeline will remain shut down, nor what effects the suspension has had on the volumes of crude handled: the available material reports the halt of the infrastructure, not the flows. We do not know today’s Brent quotation, only the high reached on September 8. We do not know whether the hike, if it happens, will be accompanied by guidance on the following months.
Market probabilities are not central bank forecasts: they measure operators’ positioning at a given date. The 85.5% figure is fixed as of September 12, three days before the committee’s meeting opened.
Sources: Cambridge Currencies (Federal Reserve Board calendar and statements); Grow Beansprout and Yahoo Finance (CME FedWatch); Federal News Network; tagesschau.de; El País.
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