MARKETS

Traders see at least 24% chance of a post-July Fed rate hike by November, after remarks made by Fed’s Waller

Fed funds futures traders are raising their expectations for a post-July rate hike by the Federal Reserve, a day after a key policy maker stood by two more rate hikes for this year. Fed Gov. Christopher Waller indicated on Thursday that he was not swayed by June’s cooling inflation data — prompting traders to price in a 23.5% chance of a hike by November that would take the fed funds rate to between 5.5%-5.75% from its current level of 5%-5.25%. That’s up from 19.8% a day ago and factors in a widely expected quarter-of-a-percentage-point rate hike on July 26. Traders even saw a slight 1.9% chance that the fed funds rate target could go even higher, to between 5.75%-6% by November. Meanwhile, Treasury yields advanced Friday morning, with the policy-sensitive 2-year rate bouncing off a one-month low and rising to 4.68%.

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