Fed Poised for Biggest Rate Hike in 28 Years Amid Soaring Inflation, Market Angst

Contact Your Elected Officials
The Epoch Times Header

Investors have sharply raised their expectations that the Federal Reserve will on Wednesday deliver the biggest single interest rate hike in 28 years amid red-hot inflation and a turbulent selloff across world markets.

Just last week, markets gave an 8.2 percent probability that the Fed would raise the benchmark federal funds rate by three-quarters of a percentage point at its June meeting, with 91.8 percent predicting a half a percentage point boost, according to CME Groupโ€™s Fed Watch tool.

But the expectation landscape for the scale of the Fedโ€™s rate move has dramatically shifted, spurred by a violent selloff in risk assets and a sharp rise in bond yields following last weekโ€™s consumer price inflation data that showed inflationary pressures accelerating.

Investor bets as reflected in the Fed Watch tool are now showing zero probability for a 50 basis point hike and a whopping 95.6 percent probability of a 75 basis point increase when Fed Chair Jerome Powell announces the central bankโ€™s rate decision later on Wednesday.

A rate hike of 0.75 percentage points would be the biggest increase since 1994 and would put the target rate at between 1.50 percent and 1.75 percent.

โ€œThe Federal Reserve typically delivers what is discounted, which makes a 75 [basis point] hike likely today,โ€ ING analysts said in a note.

Whatโ€™s more, a growing number of investors expect an even sharper, 100 basis point increase on Wednesday, with futures contracts ascribing a 4.4 percent probability for a full percentage point hike, as of the time of reporting.

The market rout that has left equities and other risk assets battered gained steam on Tuesday, when producer price inflation data came in hot, adding to concerns that consumer price growth would be stuck in high gear for longer as input costs tend to get passed on to households.

The benchmark S&P 500 on Monday fell into a bear marketโ€”defined as a drop of over 20 percent from a recent highโ€”and on Wednesday morning remained down around 22 percent from an all-time high reached in January.

Byย Tom Ozimek

Read Full Article on TheEpochTimes.com

The Epoch Times
The Epoch Timeshttps://www.theepochtimes.com/
Tired of biased news? The Epoch Times is truthful, factual news that other media outlets don't report. No spin. No agenda. Just honest journalism like it used to be.

Remember Epsteinโ€™s โ€œLittle Black Booksโ€?

Image of Bill Clinton getting a massage from Jeffrey...

On the Major Leagueโ€™s periphery: A major trip through the minors

For Nick Dunn, the trek through the minors is a trifecta of physical, mental, and organizational hurdles filled with politics, roster volatility, and injuries.

Private Citizens are Now Looking into Epstein Client List

Most Americans have never felt so betrayed and confused by a president and his admin as they are by the Trump admin over the Epstein client list issue.

Peace In Ukraine Wonโ€™t End The Westโ€™s Hybrid War On Russia

The Westโ€™s Hybrid War on Russia to follow peace in Ukraine is inevitable due to neoconservatives and liberal-globalists in its decision-making ecosystem.

Epstein Case Closed?

The DOJ and FBI announced on Sunday evening of the July 4th holiday weekend that Jeffry Epstein had no client list and didnโ€™t kill himself in prison.

Federal Judge Blocks Trumpโ€™s Birthright Citizenship Order After Supreme Court Ruling

Judge barred Trump admin from enforcing EO limiting birthright citizenship, after Supreme Court restricted judges from issuing nationwide injunctions.

California Might Stop Making Necessary Debt Payments for 2 Years

California State Legislature met the budget submission deadline and it was signed by the governor, but they still need to cut $12 billion in spending.

MP Materials Secures Rare Earths Deal With DOD, Shares Surge 50 Percent

MP Materials Corp. announced a public-private partnership with the DOD to build out rare earth magnet supply chain and reduce dependency on China.

Ex-CIA Director Brennan Says DOJ Hasnโ€™t Contacted Him About an Investigation

Former CIA Dir Brennan said he hasn't been contacted by DOJ, FBI, or CIA following reports he and former FBI Dir. Comey are under investigation.

RFK Jr. Bans Illegal Immigrants From Government-Funded Programs

HHS Sec. Robert F. Kennedy Jr. is rescinding a 1998 interpretation of a law that allowed illegal immigrants to access certain government-funded programs.

Rubio Set to Visit Malaysia for ASEAN Meetings Amid Tariff Tensions

A delegation including U.S. Sec. of State Marco Rubio will travel to Kuala Lumpur, Malaysia, for series of high-profile meetings between July 11 and 12.

US Will Collect More Than $300 Billion in Tariff Revenues This Year, Treasury Secretary Says

U.S. is on track to potentially raise โ€œwell over $300 billionโ€ in tariff income by end of the year, Treasury Sec. Scott Bessent said during WH Cabinet meeting.

Senate Panel Advances Trumpโ€™s CDC Director Nominee

A Senate committee on July 9 voted to advance the nomination of Susan Monarez to lead the Centers for Disease Control and Prevention (CDC).
spot_img

Related Articles