Fed Signals Possible Rate Hike as Inflation Remains Above Target

New York Fed President John Williams stated that another interest rate hike may be suitable by the end of the year, given inflation remains above the Fed's target. Market expectations for a further increase have risen.

The Federal Reserve raised its benchmark interest rate by 25 basis points earlier this month, setting the federal funds target range at 3.75%-4%. Investor sentiment and comments from policymakers since the decision have increased bets on another hike.

CME Group's FedWatch tool showed a 77.5% probability of a rate hike in October, up from about 53% the previous day.