Fed Rate Hike Now 'Likely' as Markets Price in 85%+ Chance of 25 BPS Increase

Markets are pricing an extremely high probability of a Federal Reserve interest rate hike this week. According to some estimates, there's an 85%+ chance that the Fed will raise rates by 25 basis points, marking their first rate increase in roughly three years.

This potential move has been largely priced into markets, but a counter-narrative suggests that it might not be as clear-cut as it seems. Some argue that Trump's pick for Fed Chair, Kevin Warsh, would have had to prioritize avoiding rate hikes before the midterms to secure his nomination.

Warsh was indeed nominated by Trump, which has led some to question whether he would actually allow a rate hike right before the elections.