Fed Hike Odds Soar as Jobs Data Boosts Rate Expectations

The odds of a Federal Reserve interest rate hike at its upcoming meeting have risen to 58.4%, according to CME's FedWatch tool.

This increase follows a strong jobs report from the Bureau of Labor Statistics, which showed the US economy added 162,000 jobs in August and maintained an unemployment rate of 4.1%.

The all-items inflation index is running at 3.4% over the past 12 months, above the Fed's 2% target, which may put pressure on the central bank to act.

Major banks are now expecting a rate hike next week, with Macquarie moving its baseline case for the first hike to September and Bank of America warning that skipping a hike could raise questions about the Fed's credibility.