US core inflation surprised above expectations, lifting Fed swaps. Market pricing now shows a 90% probability of a Fed hike next week and two hikes fully priced for this year. Schroders global head of economics David Rees said the Fed is behind the curve; it can hike next week to permit an orderly rise in US short-term borrowing costs, or hold and risk an uncontrolled rise in long-term borrowing costs.

2026-09-11

US core inflation surprised above expectations, lifting Fed swaps. Market pricing now shows a 90% probability of a Fed hike next week and two hikes fully priced for this year. Schroders global head of economics David Rees said the Fed is behind the curve; it can hike next week to permit an orderly rise in US short-term borrowing costs, or hold and risk an uncontrolled rise in long-term borrowing costs.