Interest Rates Should Remain Unchanged Today, but at Least 3 Federal Reserve Rate Hikes Are Expected by September 2027

The Federal Reserve is expected to keep interest rates unchanged at today's 2 p.m. ET announcement, but the CME FedWatch Tool indicates at least 75 basis points of rate hikes are likely by September 2027. Three key inflation drivers—Trump's tariffs, Iran's Strait of Hormuz closure, and AI infrastructure build-out—are prompting the Fed to prepare for a more aggressive rate-hiking cycle. While the AI boom has powered stock market gains, rising borrowing costs could threaten the historically expensive market if the data center build-out slows.