Fed Rate Hike Expectations Reach Record Levels Ahead of Key Meeting

Bond traders are pricing in a Federal Reserve interest-rate hike this week with conviction. According to data, they see more than a 90% chance that Fed Chairman Kevin Warsh and his colleagues will lift the benchmark policy rate by a quarter point from the current 3.5%-3.75% range. This equates to roughly 23 basis points of tightening priced in.

Kitty Richards, Senior Fellow at the Groundwork Collaborative, joined Balance of Power and stated that it will be 'extremely difficult' for the Fed not to raise rates.

While no specific date or target was mentioned, the market's high level of conviction suggests a rate hike is likely. The Federal Reserve's next meeting is this week, but it remains to be seen whether they will follow through on traders' expectations.