Record 60% Probability of Fed Rate Hike in September
Market-implied odds of a 25bps rate increase at the September FOMC meeting hit an all-time high of 60%, according to The Kobeissi Letter.
The probability of a quarter-point Federal Reserve rate hike in September has climbed to 60%, a record high, per The Kobeissi Letter. The jump reflects shifting expectations in interest rate markets as traders price in a more aggressive tightening path.
The move comes amid speculation that Kevin Warsh could be appointed as the next Federal Reserve Chair. The market appears to be interpreting a potential Warsh-led Fed as more hawkish, with the first policy move under his leadership possibly being a rate increase.
- Fed hike probability for September rises to 60%
- Market views Warsh as likely to deliver a rate hike if named Chair
- Record odds signal a sharp reassessment of the policy outlook
Source: The Kobeissi Letter