{"id":72391,"date":"2026-09-29T15:08:13","date_gmt":"2026-09-29T19:08:13","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/fed-rate-hike-odds-tumble-as-mediators-push-to-break-us-iran-deadlock\/72391\/"},"modified":"2026-09-29T15:08:13","modified_gmt":"2026-09-29T19:08:13","slug":"fed-rate-hike-odds-tumble-as-mediators-push-to-break-us-iran-deadlock","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/fed-rate-hike-odds-tumble-as-mediators-push-to-break-us-iran-deadlock\/72391\/","title":{"rendered":"Fed Rate Hike Odds Tumble as Mediators Push to Break US-Iran Deadlock"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Traders have slashed the probability of an October Fed rate hike to 50%<\/strong>, down from 70% previously, following dovish signals from New York Fed President John Williams.<\/li>\n<li><strong>Mediators are delivering a new interim agreement draft to Iran<\/strong> in an attempt to reopen the <strong>Strait of Hormuz<\/strong> and lift the U.S. naval blockade, despite President Trump&#39;s recent rejection of a prior proposal.<\/li>\n<li><strong>President Donald Trump met with top AI executives<\/strong>, including leaders from <a href=\"https:\/\/stockmarketwatch.com\/stock\/NVDA\" data-internallinksmanager029f6b8e52c=\"15\" title=\"stock: NVDA\">Nvidia<\/a> (<a href=\"\/stock\/NVDA\">NVDA<\/a>) and Meta (<a href=\"\/stock\/META\">META<\/a>), emphasizing <strong>self-regulation<\/strong> and maintaining the U.S. competitive lead over China.<\/li>\n<li><strong>US Agriculture Prices Paid rose 5.3% in August<\/strong>, showing a significant easing from the 7.7% increase recorded in the previous month.<\/li>\n<li><strong>Fed Governor Christopher Waller<\/strong> avoided comments on monetary policy during a speech on <strong>AI agents in payments<\/strong>, focusing instead on the technical evolution of autonomous commerce.<\/li>\n<\/ul>\n<h2>Fed Rate Expectations Shift Following Williams&#39; Remarks<\/h2>\n<p>Market expectations for a Federal Reserve rate hike in October have shifted dramatically. <strong>Traders now see a 50-50 chance of a rate increase<\/strong>, a sharp decline from the <strong>70% probability<\/strong> priced in just days ago. This recalibration followed comments from New York Fed President <strong>John Williams<\/strong>, who stated there is <strong>&quot;no urgency&quot;<\/strong> to act following the central bank&#39;s September move.<\/p>\n<p>Williams noted that while one further rate hike might be appropriate before the end of 2026, the Fed can afford to wait for more economic data. This &quot;data-dependent&quot; stance has led many market participants to believe the Fed may skip the October meeting. <em>The shift in sentiment suggests investors are increasingly betting on a &quot;higher for longer&quot; plateau rather than an aggressive immediate tightening cycle.<\/em><\/p>\n<h2>Diplomatic Push to Reopen the Strait of Hormuz<\/h2>\n<p>International mediators are making a renewed effort to break the deadlock between the <strong>United States and Iran<\/strong>. On Tuesday, negotiators were expected to hand over an updated <strong>interim agreement draft<\/strong> to Tehran. The proposed deal aims to restart talks on a final settlement for the seven-month-old conflict, which has severely disrupted global energy markets.<\/p>\n<p>Under the terms being discussed, <strong>Iran would allow the free movement of traffic through the Strait of Hormuz<\/strong>\u2014a critical chokepoint for 20% of global oil. In exchange, the <strong>U.S. would ease its blockade of Iranian ports<\/strong>. While President <strong>Donald Trump<\/strong> recently rejected a proposal from Tehran, officials indicate that progress is being made on the specific sequencing of these reciprocal steps.<\/p>\n<h2>Trump Hosts AI Leaders at the White House<\/h2>\n<p>President Trump held what he described as an <strong>&quot;extremely friendly and productive&quot;<\/strong> meeting with the nation&#39;s top artificial intelligence leaders on Tuesday. Attendees included <a href=\"https:\/\/stockmarketwatch.com\/stock\/NVDA\" data-internallinksmanager029f6b8e52c=\"15\" title=\"stock: NVDA\">Nvidia<\/a> (<a href=\"\/stock\/NVDA\">NVDA<\/a>) CEO Jensen Huang, Meta (<a href=\"\/stock\/META\">META<\/a>) CEO Mark Zuckerberg, and representatives from OpenAI and Anthropic. The discussion centered on balancing rapid innovation with necessary oversight.<\/p>\n<p>Trump emphasized that <strong>&quot;self-regulation is very important in AI&quot;<\/strong> and expressed a desire to work with local communities to ensure the technology&#39;s benefits are widely felt. The administration remains focused on ensuring the <strong>U.S. maintains its &quot;big lead&quot; in AI<\/strong>, particularly as competition with China intensifies. <em>Industry leaders reportedly expressed a willingness to cooperate with the government to ensure AI systems are developed responsibly.<\/em><\/p>\n<h2>Cooling Agricultural Inflation and Fed Silence<\/h2>\n<p>New data from the <strong>U.S. Department of Agriculture<\/strong> provided a glimmer of hope for cooling inflationary pressures. <strong>Prices paid by farmers rose 5.3% in August<\/strong>, a notable deceleration from the <strong>7.7% increase<\/strong> seen in July. Meanwhile, prices received by farmers fell by <strong>2.0%<\/strong>, suggesting that the upward pressure on food supply chain costs may be beginning to stabilize.<\/p>\n<p>In a separate development, <strong>Federal Reserve Governor Christopher Waller<\/strong> delivered a speech titled &quot;Payments in the Age of AI Agents&quot; at the Sibos conference. However, Waller made <strong>no comments on the current economic outlook or monetary policy<\/strong>. His remarks focused exclusively on how autonomous AI agents could revolutionize cross-border payments and combat illicit finance, leaving markets to look elsewhere for clues on the Fed&#39;s next move.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Traders have slashed the probability of an October Fed rate hike to 50%, down from 70% previously, following 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