Fed Faces Growing Pressure to Hike Rates as Price Risks Rebound
Bond traders now see nearly a 35% chance of a rate increase as renewed oil and tariff pressures revive inflation concerns, futures data show.
- Federal Reserve officials begin their policy meeting Tuesday, July 28, to determine whether to hold or hike interest rates, as investors have boosted the probability of an increase to 35%.
- Renewed conflict in the Middle East and collapse of the U.S.-Iran ceasefire have sent Brent crude prices back above $96 a barrel, threatening to reverse recent inflation progress.
- Fed Chair Kevin Warsh faces pressure to demonstrate inflation-fighting resolve, though BofA and Deutsche Bank strategists remain split on whether a hike or hold better serves policymakers' credibility.
- Joseph Lavorgna, chief economist at SMBC Nikko Securities America, noted that raising rates now might be viewed as less of a "political move" than a hike closer to midterm elections.
- Beyond this meeting, robust AI investment and a strong labor market suggest rates may continue rising, as futures market pricing indicates a 61% probability of at least two quarter-point hikes this year.
16 Articles
16 Articles
Fed faces new pressure to hike rates as price risks rebound | Honolulu Star-Advertiser
Federal Reserve officials will head into their policy meeting this week confronting a resurgence in price pressures that could make their decision on whether to hold or hike interest rates a close call — and a contentious one.
The Derrick
Fed faces new pressure to hike rates as price risks rebound
Federal Reserve officials will head into their policy meeting this week confronting a resurgence in price pressures that could make their decision on whether to hold or hike interest rates a close call — and a contentious one. Renewed tensions…
What would a rate hike signal about the new Fed chief's MO?
The Federal Reserve typically telegraphs its interest rate moves in advance, then follows through. This week will provide the clearest evidence yet on whether chairman Kevin Warsh is ending the era of the no-surprises Fed.The big picture: Markets are now putting meaningful odds on the Fed delivering an interest rate hike at the conclusion of its two-day meeting this week.If the Federal Open Market Committee were to do so, it would suggest a new …
Growing number of brokerages see July Fed decision as ‘a close call’
July 27 (Reuters) – A growing number of major brokerages believe there is a real risk of the Federal Reserve delivering a rate hike at its meeting this week, given this month’s surge in oil prices and the escalation in tensions in the Middle East. Most brokerages, including BofA Global Research and Deutsche Bank, still expect Fed policymakers to keep rates unchanged, but limited guidance from Chair Kevin Warsh, combined with the re-escalation …
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