ISM PMI Surges to Four-Year High, Fueling Rate Hike Expectations

The ISM PMI rose to 55.6 in July, exceeding expectations and marking a four-year high.

The report came just days after three Federal Open Market Committee members voted for an interest rate hike, sparking concerns of a rate increase at the September meeting.

The increased likelihood of a rate hike has been reflected in CME FedWatch probabilities, with a 65% chance assigned to a quarter-point increase in September.

The strong manufacturing data has put pressure on investors who had expected the Federal Reserve to remain on hold, and the next key release will be the July employment report on Friday, August 7.