Fed Decides Wednesday With Brent Above $104 and Markets Leaning Toward a Hike

The Federal Open Market Committee meets September 15 and 16, with the decision due at 2:00 p.m. Eastern on Wednesday. The fed funds target sits at 3.50% to 3.75%, and markets are pricing a 25 basis point hike as more likely than not, following Chair Warsh's hawkish Jackson Hole remarks and a solid August employment report. Note the direction: this is a tightening debate, not an easing one.

Energy is the pressure the Fed cannot ignore. Brent crude settled at $104.61 a barrel on September 12, down 2.81% on the day, with WTI at roughly $99.99, off 2.53%. Those are elevated levels by any recent standard and they feed directly into headline inflation, but they are not the $110 figure that has circulated in some of this week's preview coverage. The distinction matters for anyone sizing the inflation impulse.

The decision itself is the least interesting part of Wednesday. Because a hike is largely priced, the market-moving content is the Summary of Economic Projections and the dot plot, which show how many further moves the committee expects and how far it thinks the terminal rate has shifted. A hike delivered alongside a dovish dot plot and a hike delivered alongside a higher terminal path are very different outcomes for duration and for rate-sensitive equities, even though the headline is identical.

What to watch after 2:00 p.m.: the median 2027 dot, any change to the language on inflation persistence, and whether Powell's press conference treats the oil move as transitory or as something that has begun to leak into core. Energy names have been the beneficiaries of the crude move while rate-sensitive sectors have worn the cost, and the projections are what determine whether that split widens or unwinds.