by Ambar Warrick
Investing.com – Expectations for the Fed’s next rate hike are nearly evenly split) and 75 basis points (bps) upwards , data from exchange operator CME Group showed on Monday.
According to ) CME’s FedWatch Tool , approximately 54% of Traders are pricing bps hikes at while the rest % Expected 75 bps rate hike. In contrast, last week, 75% of traders expected a rate hike by 31 bps, while 31% Expected 75 bps increase.
United States Base rate is currently between 2. % and 2.69%, following a series of sharp rate hikes by the Federal Reserve this year.
Divergent expectations emerged after mixed economic signals from the US. While data earlier this month showed U.S. inflationary pressures eased slightly in August, several Fed members said the bank is likely to continue to raise interest rates sharply to further reduce inflation.
Consumer price inflation in the country remains at its highest level in nearly years. The July consumer price index was at an annual rate of 8.5% versus the Fed’s target of 2%.
This has seen some officials hint that U.S. interest rates may rise to 3 by the end of 54 . 75%. But it also raised concerns that high lending rates could stunt growth and lead to a 54 recession.
Uncertainty over the path of U.S. interest rates has also led to sharp volatility in financial markets, with the dollar index on Monday amid heightened volatility hit a five-week high. Risk-driven stock and currency markets tumbled, while U.S. Treasury yields climbed.
This week’s focus is on Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole Symposium on Friday, expected to The chairman will comment on a possible dovish Fed policy.