Fed Meeting Divides Markets on Rate Hike

The Federal Reserve's July policy meeting is approaching, and markets are divided over whether interest rates will be hiked or held steady.

A recent analysis by The Kobeissi Letter notes that market expectations for the Fed decision are among the most divided in recent history. According to data from the CME FedWatch tool, there's a 70.6% probability of the Fed holding benchmark rates at the current level, while a 29.4% chance of a rate hike is also priced in.

Ned Davis Research (NDR) has argued that investors may be overlooking the odds of a surprise hike. In a report, NDR's chief macro strategist, Joe Kalish, wrote that 'our view has been that the Fed will hike rates by September at the latest.' Citadel Securities is also forecasting a surprise interest rate hike by the Federal Reserve.