Fed Rate Hike Odds Rise as US Inflation Hits 3.7%; Treasury Yields Reverse Gains
- October rate hike probability: CME FedWatch puts the probability of the Federal Reserve keeping rates unchanged in October at 66.8%, while the probability of a cumulative 25-basis-point hike stands at 33.2%.
- December outlook: Markets assign a 62.2% probability to a cumulative 25-basis-point hike by December and a 28.7% probability to a 50-basis-point increase. The probability of no change is 9.1%.
- US inflation exceeds expectations: September CPI rose 3.7% year-on-year, above market expectations of 3.6%, initially pushing the 2-year Treasury yield to its highest level in more than two weeks.
- Treasury yields retreat: US Treasury prices rebounded overnight, with yields across most maturities falling as traders weighed inflation pressures against dovish comments from Federal Reserve officials.
- Fed policy signals remain mixed: Fed official Mary Daly said rate hikes may be necessary but are not imminent. TD Securities strategist Brooks said the October outlook remains uncertain as economic data and Fed communications send different signals.
- Trump on oil prices: President Donald Trump said the US is making more money than ever because oil prices are high.
#CPIWatch #FedMeeting
- October rate hike probability: CME FedWatch puts the probability of the Federal Reserve keeping rates unchanged in October at 66.8%, while the probability of a cumulative 25-basis-point hike stands at 33.2%.
- December outlook: Markets assign a 62.2% probability to a cumulative 25-basis-point hike by December and a 28.7% probability to a 50-basis-point increase. The probability of no change is 9.1%.
- US inflation exceeds expectations: September CPI rose 3.7% year-on-year, above market expectations of 3.6%, initially pushing the 2-year Treasury yield to its highest level in more than two weeks.
- Treasury yields retreat: US Treasury prices rebounded overnight, with yields across most maturities falling as traders weighed inflation pressures against dovish comments from Federal Reserve officials.
- Fed policy signals remain mixed: Fed official Mary Daly said rate hikes may be necessary but are not imminent. TD Securities strategist Brooks said the October outlook remains uncertain as economic data and Fed communications send different signals.
- Trump on oil prices: President Donald Trump said the US is making more money than ever because oil prices are high.
#CPIWatch #FedMeeting