Bidenflation Soars! Market Now Sees 100 Basis Point Fed Hike This Month

The bigger-than-expected increase in the pace of inflation in June has sent expectations for a rate hike at the end of the month into warp speed.

Fed funds futures are now pricing in a nearly 80 percent probability of a full percentage-point rise at Federal Open Market Committee meeting concluding two weeks from Wednesday, according to the barometer of the contracts maintained by the CME Group.

As recently as Tuesday, the market was pricing in a 92 percent chance of a 75 basis point hike. One week ago, prices implied a zero percent change of a 100 basis point hike.

A basis point is one-hundredth of a percentage point. So a 75 basis point hike indicates a 2/3 of a percentage point increase and a 100 basis point hike indicates a hike of one percentage point.

Reporters on Wednesday pressed Atlanta Fed President Raphael Bostic on how far the Fed would go. (Read more from “Bidenflation Soars! Market Now Sees 100 Basis Point Fed Hike This Month” HERE)

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