Fed Rate-Hike Bets Rise to 85% After Hot August Inflation Data
CME FedWatch now puts a quarter-point hike at 87% as hotter inflation and rising oil prices push Treasury yields higher.
- 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.
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11 Articles
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.
coin-turk.com
BITRSS🚨 August inflation in the US strengthened the likelihood of a new Fed interest rate hike. 📉 A Grayscale executive said there may be temporary pressure in the crypto market. 💬 Pandl notes that there may be a limited pullback opportunity on the $BTC side for those who missed the August rise. 📊 Although core inflation fell to its lowest level since 2021, the market priced in an interest rate hike probability of 85 to 90 percent. Read More: US i…
US inflation was largely as expected in August. Yet a sneaky price fever is peeking out in the details of the statistics. The market is approaching certainty that the Fed will raise interest rates next week. Now the question is not whether the Fed will raise, but by how much.
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