Intelligence Feed event · Policy · 2026-08-14

    September Fed Rate Hike Probability Drops to 44% After Jobs Miss

    Question

    September Fed Rate Hike Probability Drops to 44% After Jobs Miss

    Direct answer

    The U.S. labor market showed unexpected signs of contraction in July, with 23,000 jobs lost. This has significantly altered the interest rate outlook, with CME FedWatch data now showing a 44% chance of a hike, down from a strong majority last week. The Fed is now in a difficult position, as holding rates high could accelerate labor market deterioration, while cutting could reignite inflationary pressures if the job losses prove transitory.

    Original publisher
    Market Ontology
    Evidence through
    2026-08-14
    Published
    2026-10-20
    Revision
    1 · 2026-10-20

    Cite as: Market Ontology, “September Fed Rate Hike Probability Drops to 44% After Jobs Miss”, revision 1, evidence through 2026-08-14. https://marketontology.com/market-events/2026-08-14/september-fed-rate-hike-probability-drops-to-44-after-jobs-miss-c0f7a3

    POLICY
    September Fed Rate Hike Probability Drops to 44% After Jobs Miss
    The U.S. labor market showed unexpected signs of contraction in July, with 23,000 jobs lost. This has significantly altered the interest rate outlook, with CME FedWatch data now showing a 44% chance of a hike, down from a strong majority last week. The Fed is now in a difficult position, as holding rates high could accelerate labor market deterioration, while cutting could reignite inflationary pressures if the job losses prove transitory.
    CME
    Impact
    86
    AUG 14
    SIG
    90%
    CME
    September Fed Rate Hike Probability Drops to 44% After Jobs Miss
    The U.S. labor market showed unexpected signs of contraction in July, with 23,000 jobs lost. This has significantly altered the interest rate outlook, with CME FedWatch data now showing a 44% chance of a hike, down from a strong majority last week. The Fed is now in a difficult position, as holding rates high could accelerate labor market deterioration, while cutting could reignite inflationary pressures if the job losses prove transitory.
    → Dovish repricing of the front-end curve due to labor market weakness.
    Impact
    The U.S. labor market showed unexpected signs of contraction in July, with 23,000 jobs lost. This has significantly altered the interest rate outlook, with CME FedWatch data now showing a 44% chance of a hike, down from a strong majority last week. The Fed is now in a difficult position, as holding rates high could accelerate labor market deterioration, while cutting could reignite inflationary pressures if the job losses prove transitory.
    Affected
    CME
    Transmission
    Dovish repricing of the front-end curve due to labor market weakness.

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    What happened next

    AssetCallBase close+1 day+5 days+20 days
    CMEMixed269.80 2026-08-14-0.71%+1.92%+3.95%

    Closing prices from stored daily bars; returns measured from the last close on or before the event date. Not a recommendation.

    No verifiable public source recorded for this card.

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