Fed Rate Hike Odds Surge to Near 70%, Weighing on Silver Price

Market expectations for a 25-basis-point Fed rate hike in October have surged to nearly 69.7%, up sharply from 48.7% last week, according to the latest Flash US S&P Global PMI data.

The strong manufacturing reading of 52.0 helped offset slight pullbacks in services and composite activity, adding to the case for a rate hike.

Fed officials have reiterated support for the recent rate increase, warning of persistent inflation risks, with several policymakers issuing fresh warnings about the need for further tightening.

The FXS Fed Sentiment Index rose by 0.42 points to 148.81, firmly in hawkish territory, confirming a market narrative of persistent Fed tightening risk that should remain supportive for the Dollar against lower-yielding peers.