Fed Rate Hike Odds Soar to 82.4% Amid Iran Conflict, Inflation Fears

The probability of a Federal Reserve rate hike has surged to 82.4%, according to the CME Group's FedWatch Tool, which analyzes 30-day Fed funds futures to gauge the likelihood of Federal Reserve rate increases. This marks a significant jump from the 52.4% probability recorded on July 16.

The increase in rate hike odds is attributed to three key factors: energy supply concerns related to the conflict with Iran, Trumpflation entering a new phase, and higher costs for petroleum-based products and transportation routes being passed on to consumers.