Forex
US Markets Predict 71% Chance of Fed Rate Hike in October
US markets are giving a high probability of another interest rate hike in October by the Federal Reserve. The chances were estimated at 71% after comments from Fed Governor Michael Barr and data showing accelerating inflationary pressure.
Barr spoke at a housing conference in Chicago, saying that further adjustments to monetary policy will likely be needed to return inflation to its target level on time. He supported last week's 0.25-percentage-point rate increase by the Federal Open Market Committee, which raised the benchmark rate to 3.75-4%.
The market reaction was reflected in the yield on two-year US Treasury bonds, which rose by more than 13 basis points to 4.9%. This is a sign that investors expect another rate hike in October.