Fed rate hike odds rise ahead of next week’s meeting
Fed rate hike odds rise as inflation and oil prices keep pressure on markets See what the next CPI report could mean for the Fed’s decision and rates
Market pricing suggests the Federal Reserve is more likely to raise interest rates at its meeting next week after new wholesale inflation data and higher oil prices increased concerns about persistent price pressures.
Traders moved the implied probability of a rate hike to about 70% after August producer price data showed wholesale costs rising 0.4%, while U.S. crude moved above $100 a barrel amid renewed Middle East tensions. Expectations for another increase later this year also climbed.
The Fed will receive one more major inflation reading on Friday, when the consumer price index is released. Economists and market participants are watching that report closely for signs of whether inflation is cooling enough to alter the central bank’s next move.