Warsh's Hawkish Comments Send Hike Odds Soaring to 60.4%

Fed expectations for a rate hike in September have increased following Federal Reserve Chair Kevin Warsh's speech at the Jackson Hole Economic Symposium. Warsh's comments were seen as hawkish, boosting market expectations for a quarter-point hike next month.

Traders of fed funds futures now see a 60.4% chance of a hike in September, up from around 56% on Friday, according to the CME's FedWatch tool. Deutsche Bank continues to expect a 50 basis point hike this year, with increases at the September and December meetings.

The hawkish tone of Warsh's speech has raised concerns that it may put the Fed 'at odds' with the Treasury, given the differing views on monetary policy. The unexpected shift in market expectations has caused gold to fall and Asian stocks to decline.