Fed rate-hike bets rise to 85% after hot August inflation data
- On Friday, the CME FedWatch Tool showed an 87% probability that the Federal Reserve will lift its fed funds rate by 25 basis points on Wednesday, a dramatic shift in market sentiment.
- Friday's inflation report from the Bureau of Labor Statistics showed August consumer prices rose 3.4% year-over-year, while core inflation climbed 0.3% monthly, exceeding expectations and signaling persistent price pressures.
- Treasury yields climbed as traders priced in tighter policy; the 10-year yield approached 5% while the 30-year Treasury was quoted at 5.32%, reflecting market reaction to the firm inflation data.
- Despite inflation concerns, equities rallied on Friday as the S&P 500 added 1.1% and the Nasdaq Composite surged 1.3%, with 27 of the Dow Jones Industrial Average's 30 components trading higher.
- Investors now focus on the September 16 Federal Open Market Committee meeting, where officials will signal whether this rate hike represents a singular adjustment or the start of further monetary tightening.
15 Articles
15 Articles
Fed Rate Hikes Won’t Be Enough to Get Inflation to 2%
The latest inflation report points to a hard truth: The US is not going back to a 2% inflation rate anytime soon. At least not easily. It’s clear, as inflation picks up and real wages continue to fall, that the period of smooth disinflation is over. The reasons could be government policy — on trade, immigration or energy — but for the […]
(New York = Yonhap News) Correspondent Kim Yeon-sook = As inflationary pressures in the U.S. show no signs of abating, expectations that the U.S. Federal Reserve (Fed) will raise the benchmark interest rate...
Evening Standard
Stocks climb but US data boosts predictions of Fed interest rate hike
In London, the FTSE 100 index ended up 41.52 points, 0.4%, at 10,650.44.
With Just 5 Days to Next FOMC Meeting, Odds of Fed Rate Hike Surge to Over 85%
Market sentiment on the Fed's next move has flipped dramatically in just one month, and inflation data released this morning may have sealed the deal before traders even had time to react.
The Economic Times
Times of IndiaFed rate-hike bets rise to 85% after hot August inflation data
Recent inflation figures have exceeded expectations, leading many to anticipate a rate hike from the Federal Reserve. Core consumer prices increased more than what economists forecasted last month, and alongside rising oil prices, this trend indicates that inflation is on an upward trajectory. Traders are now estimating an 85% likelihood of a quarter-point increase in the upcoming meeting, with further rate hikes expected in December.
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