Fed Rate Hike Odds Surge to 38% Amid Oil Price Rally and Geopolitical Tension

Rising energy costs and renewed geopolitical tension are pushing investors to reassess the Federal Reserve's next move before its meeting next week.

The shift leaves markets assigning a 38 per cent chance of a quarter-point rate increase on Wednesday, up from 13 per cent a week earlier.

Brent crude surpasses $100 a barrel for the first time since May, up 25 per cent since June, reviving U.S. inflation concerns.

Some investors argue that if market pricing for a hike rises further before the decision, policymakers could come under added pressure to follow through rather than risk loosening financial conditions relative to expectations.