Fed Rate Hike Odds Rise to 61% After PPI Comes in Hotter than Expected

Live updates

1. 4d ago

   Fed Rate Hike Odds Surge Following High Inflation Data

   Market expectations for a Federal Reserve rate hike have risen sharply after Producer Price Index data exceeded expectations. Some traders now bet there is a 90% chance of a rate hike this Wednesday, while other reports place the odds at 61%. The Federal Reserve is monitoring inflation data closely to determine its next move, with a small shift in inflation rates potentially deciding the outcome. Traders are currently positioning for a hike as core prices show a monthly jump.

   Why it matters

   The Federal Reserve adjusts interest rates to control inflation and stabilize the economy. Higher producer prices often signal future increases in consumer prices. This creates pressure on the Fed to raise rates to cool economic activity.

   Still unconfirmed

   • Rate hike odds rose to 61% after PPI came in hotter than expected.
   • Markets are betting on a 90% chance of a rate hike this Wednesday.
   • The Fed may lean toward a hike while eyeing inflation data.

   What to watch next

   • Friday's CPI inflation report
   • The Federal Reserve's interest rate decision this Wednesday
   Sources used for this update (6)

   1. wsj.com — A Tiny Shift in the Inflation Rate Could Decide the Fed’s Next Move
   2. Reuters — Fed, eyeing inflation data, may lean toward a hike, traders bet
   3. CNBC — Friday's CPI inflation report is even more important than usual. Here's what to expect
   4. Yahoo Finance — Fed Rate Hike Odds Rise to 61% After PPI Comes in Hotter than Expected
   5. Bloomberg.com — What a Fed Rate Hike Actually Means for the US Economy and Inflation
   6. finance.yahoo.com — Fed rate hike odds surge to 90% on monthly jump in core prices
   confidence 60%