Fed rate hike

Major US and European financial institutions anticipate interest rate hikes at the September FOMC meeting; some predict three hikes this year.

Major US and European financial institutions expect interest rate hikes at the September FOMC meeting, with some predicting three hikes this year.

Major US and European financial institutions expect a 90% interest rate hike at the September FOMC meeting; some predict three hikes this year.

GOLDMAN, JPMORGAN NOW EXPECT FED TO HIKE THIS WEEK • • Goldman Sachs and JPMorgan have shifted to expecting a 25 bp Fed hike at the September meeting after hotter August inflation and the renewed oil surge. Markets are pricing roughly an 87% probability of a hike, according to Reuters. • JPMorgan also expects another increase in December. • • Market angle: the narrative has moved decisively from “will the Fed hike?” toward the size and persistence of the renewed tightening cycle.

Goldman throws in towel on no rate hikes: • • "We now expect a 25bp hike at the September FOMC meeting next week (vs. a hold previously). Additional hikes at later meetings are possible but are not our baseline. While today’s CPI report only raised our August core PCE forecast slightly to 0.26% and has not changed our fundamental inflation view, we think that the FOMC will want to avoid the market reaction that would likely follow from remaining on hold when the market is pricing a nearly 90% chance of a hike."

Live: The odds of a rate rise at the September meeting rose sharply last month after Kevin Warsh, the Fed chairman, signaled that he was open to raising rates, although he didn’t detail what would tip him in that direction. Warsh not only indicated that he did not think that rates were restraining economic activity, but he also downplayed any progress in inflation over the summer. Still, investors have been left guessing at what he wants to do, reflecting his deliberate strategy of keeping his preferences close to his chest.

Traders on Friday increased their bets on a Federal Reserve interest rate hike later this month after the latest jobs data showed stronger-than-expected job growth in August. Short-term interest rate futures now point to a roughly 65% ​​probability of a rate hike at the Fed's September 15-16 meeting, up from about 55% before the Bureau of Labor Statistics report. The number of jobs in the US rose by 162,000 in August, far exceeding expectations of 55,000. #Arabic_Business

The Fed meeting minutes revealed that more than three people were in favor of raising interest rates, but the slowing economy reduced the probability of a September rate hike to 36%.

FED RATE HIKE ODDS BY SEPTEMBER MEETING FALL TO 31% ON POLYMARKET • • The contract is down 12 points on the day, with $2.19M in volume. • • The FOMC held the target range at 3.50-3.75% on July 29 in a 9-3 vote, with Cleveland's Hammack, Minneapolis' Kashkari and Dallas' Logan dissenting in favor of a 25 bps increase. • • The statement said inflation remains elevated relative to the 2% goal, partly reflecting supply shocks in sectors including energy, while activity is expanding at a solid pace and job gains have kept pace with the workforce.

SEPTEMBER FED HIKE LOOKS UNLIKELY • • Baird’s Ross Mayfield says softer core inflation and limited wage pressure strengthen the case for the Fed to hold rates steady in September. • • He sees those trends as the “bedrock for a pause, reducing the likelihood of another rate hike at the next meeting.

Bond markets are bracing for US jobs data on Friday, which could ease growing expectations that the Federal Reserve will raise interest rates at its next meeting in September. Markets are pricing in a more than 50% probability of a quarter-point rate hike on September 16. These odds rose on Thursday after the Financial Times reported that Fed Chair Kevin Warsh is prepared to raise rates if inflation readings are strong in the coming weeks. A weak labor market could ease concerns that it is fueling inflation. The jobs report is expected to show the creation of around 80,000 jobs in July. Put options on 10-year US Treasury futures saw a sharp increase in open interest, with strike prices reflecting expectations of a yield approaching 5%, a level yields briefly surpassed in 2023 for the first time since 2011. 2007 #Arabic_Business

MACRO: Fed Chair Kevin Warsh is reportedly open to a September rate hike if inflation runs hot, with three FOMC members already dissenting in favor of an immediate hike at the Fed's last meeting.

Live: Investors have pushed out expectations of a potential rate increase. Ahead of the meeting, investors bet on a quarter point rate hike following either this week’s Fed meeting or certainly at September’s meeting. As things stand, investors are now priced for one quarter point rate hike this year by December, with odds for September now a coin toss.

Live: Fed leaves interest rate unchanged, but hike widely expected at next meeting in September

WASHINGTON (AP) — Federal Reserve leaves interest rate unchanged in 9-3 vote, but a hike is widely expected at next meeting in September

POLYMARKET: 95% CHANCE OF NO FED RATE CHANGE AT JULY MEETING • • Yes: 95% • No: 5% • Yes odds up 18%, about $63.6M wagered. • • The jump follows softer-than-expected inflation data this week that had traders cutting bets on a Fed rate hike. The July FOMC meeting is July 28-29.