Wall Street Bets on Fed Rate Hike: Here's What It Means for Bitcoin, Bonds and Trump

In brief

• CME's FedWatch tool puts the odds of a 25-basis-point hike Wednesday at 94.5%, which would push the federal funds rate to 3.75%-4% from 3.50%-3.75%.
• A Wall Street Journal survey found nearly every major bank expects the September hike, with most forecasting 50 basis points of total tightening in 2026, and Bank of America, Deutsche Bank and RBC calling for 75.
• The move sets up a political clash: President Trump handpicked Fed Chair Kevin Warsh hoping for lower rates, not higher ones, and has spent the past two weeks publicly pressuring him not to hike.

Wall Street is bracing for the Federal Reserve to do something it hasn't done since 2023: raise interest rates.

The Federal Open Market Committee wraps up its two-day meeting Wednesday, and CME's FedWatch tool puts the odds of a quarter-point hike at 94.5%, up from under 50% a month ago.

The shift from unlikely to near-universal happened fast. A Wall Street Journal survey published this week found nearly every major bank now expects a hike on Wednesday, with most, including Barclays, Citigroup, JPMorgan, Morgan Stanley and UBS, forecasting 50 basis points of total tightening by year-end.

Bank of America, Deutsche Bank and RBC are more hawkish still, calling for 75 basis points of tightening this year. Goldman Sachs sits at the dovish end of the hikers, penciling in just this week's quarter point and nothing more. Jefferies and Oxford Economics are the real outliers, forecasting a cut in December and in 2027, respectively.