Fed Hike Expected as Wall Street Banks Shift to Quarter-Point Increase

The Federal Reserve's September 15-16 meeting is expected to bring a quarter-point hike on Wednesday, according to Wall Street forecasts from Goldman Sachs, J.P. Morgan, HSBC, and Deutsche Bank.

This shift in consensus comes after August inflation data showed consumer and producer prices rising hotter than expected, while oil prices surged above $100 a barrel due to hostilities in the Middle East.

HSBC economist Ryan Wang attributed the change of heart to 'lack of inflation progress,' which has tipped the balance in favor of a hike. Markets now price a 90% chance of a quarter-point move, up from about 70% before the data.