Traders are now seeing a near-certainty that the Federal Reserve enacts its third consecutive 0.75 percentage point interest rate increase when it meets later this month. The probability of a three-quarter point hike moved to 82% Wednesday morning, according to the CME Group’s FedWatch tracker of fed funds futures bets. That follows a series of positive economic data and statements from Fed officials indicating that tight policy is likely to persist well into the future. In a pivotal speech Aug. 26, Fed Chairman Jerome Powell warned that warned that increases will proceed and higher rates likely will stay in place. “In June a 75 [basis point] rate hike from the Federal Reserve was seen as surprising acceleration from the 50bp and 25bp delivered at the two previous meetings. Less than three months later, 75bp has become something of a global norm with both the [European Central Bank] and Bank of Canada set to raise rates by 75bp,” Citigroup economist Andrew Hollenhorst said in a client note Wednesday.
Source: CNBC
