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Fed hike odds rise as US August jobs beat expectations

Markets moved toward a quarter-point increase at the September 15-16 meeting after nonfarm payrolls rose 162,000 in August and the unemployment rate stayed at 4.1%.

Reported · Written up by our desk · Central Banks

LiveMint Markets reports that attention is centering on the Fed’s September 15-16 policy meeting as investors reassess the interest-rate path following a stronger-than-expected US jobs report, with traders also citing elevated crude oil prices and Middle East tensions as inflation risks.

Data released on Friday showed US nonfarm payrolls increased by 162,000 in August after a revised rise of 23,000 in July, compared with forecasts for a gain of 56,000. The unemployment rate held steady at 4.1%, in line with expectations.

According to Julius Baer Chief Economist David Kohl, the August jobs upside reflected both a robust underlying trend and technical seasonality effects, including a large difference in how seasonal adjustment performed in this year’s estimate versus August 2025. The share of industries adding jobs rose to 55.6%, and the July payroll decline was revised into a net two-month increase of 55,000.

After the report, markets edged toward a rate hike, with CME Group’s FedWatch tool pricing about a 60% chance of a quarter-percentage-point increase at the September meeting, while probabilities shifted to 40% for no change and 60% for a hike ahead of the September 16 FOMC decision.

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