A Fed Rate Hike of 75 Basis Points Is a Done Deal for Traders - 13 iunie 2022

Traders are betting the Federal Reserve will raise rates by three quarters of a percentage point at least once in its next three meetings to cool the hottest inflation in four decades. Money markets are pricing 175 basis points by its September decision, implying two half-point and one 75 basis points hike, according to interest rate swaps tied to FOMC policy outcome dates. That’s upgraded from only fully pricing half-point hikes previously. The last 75 basis-point hike by the Fed was made in November 1994. The shift in tightening bets after Friday’s inflation numbers has sparked a global equity selloff and pushed the US S&P 500 (DE.SXR8) closer to a bear market. A closely-watched part of the US yield curve inverted Monday, reflecting concern that aggressive rate hikes will push the economy into a recession. All eyes will be on this week’s Fed statement and Chair Jerome Powell’s post-meeting press conference, where policy makers’ characterization of inflation and long-term forecasts for the fed funds target -- the so-called dot plot -- will be critical.

https://finance.yahoo.com/news/fed-rate-hike-75-basis-074946324.html