Markets see just a one-in-three chance the federal reserve hikes, but chris turner of ING said to expect the FOMC to sound prepared to do so

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Markets see just a one-in-three chance the federal reserve hikes, but chris turner of ING said to expect the FOMC to sound prepared to do so

Fed rate hike deadlines

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by Estefano Gomez

Markets currently estimate a one-in-three likelihood that the Federal Reserve will implement a rate hike during its July 28–29 meeting. Despite this modest probability, ING’s Chris Turner suggests that the Federal Open Market Committee (FOMC) may communicate a readiness to increase rates if necessary, while possibly opting not to act immediately. The federal funds target range has remained at 3.50%–3.75% since the June meeting, as inflation persists at elevated levels. Market participants are closely monitoring the FOMC’s language for indications of future policy direction, with CME Fed funds futures reflecting a roughly 30% chance of a July hike.

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Recent market data shows varied expectations for future meetings. Notably, there is a 68.5% expectation of a hike by the September 15–16 meeting, up from 52% a week ago. Meanwhile, the probability of a rate increase during the current July meeting has stabilized around 23.5%, reflecting cautious sentiment among market participants. October’s meeting sees a higher probability of 71.5% for a rate hike, suggesting a growing belief that the Fed may act later in the year.

Key Takeaways

  • Market pricing suggests a 30% chance of a July Fed rate hike, consistent with a cautious stance.
  • The FOMC’s language is expected to indicate readiness for a potential future hike, aligning with a strategic approach.
  • September and October meetings show higher probabilities for rate hikes, indicating shifting market expectations.

What to Watch

Watch for the FOMC’s statement and any comments from Fed Chair Jerome Powell for indications of future monetary policy direction. Key indicators include whether the Fed indicates a readiness to hike rates if necessary, which would be supportive of a YES outcome for later meetings. Additionally, any shifts in inflation data or economic indicators could significantly impact market pricing for upcoming meetings. The Fed’s communication strategy and economic assessments during this period may provide further clarity on the likelihood of future rate adjustments.

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Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.
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Markets see just a one-in-three chance the federal reserve hikes, but chris turner of ING said to expect the FOMC to sound prepared to do so

Markets see just a one-in-three chance the federal reserve hikes, but chris turner of ING said to expect the FOMC to sound prepared to do so

Fed rate hike deadlines

by Estefano Gomez

Share

Add us on Google

https://www.thehotelwashington.com/washington-dc-travel-guide/federal-reserve-building-in-washington-dc

Markets currently estimate a one-in-three likelihood that the Federal Reserve will implement a rate hike during its July 28–29 meeting. Despite this modest probability, ING’s Chris Turner suggests that the Federal Open Market Committee (FOMC) may communicate a readiness to increase rates if necessary, while possibly opting not to act immediately. The federal funds target range has remained at 3.50%–3.75% since the June meeting, as inflation persists at elevated levels. Market participants are closely monitoring the FOMC’s language for indications of future policy direction, with CME Fed funds futures reflecting a roughly 30% chance of a July hike.

Advertisement

Recent market data shows varied expectations for future meetings. Notably, there is a 68.5% expectation of a hike by the September 15–16 meeting, up from 52% a week ago. Meanwhile, the probability of a rate increase during the current July meeting has stabilized around 23.5%, reflecting cautious sentiment among market participants. October’s meeting sees a higher probability of 71.5% for a rate hike, suggesting a growing belief that the Fed may act later in the year.

Key Takeaways

  • Market pricing suggests a 30% chance of a July Fed rate hike, consistent with a cautious stance.
  • The FOMC’s language is expected to indicate readiness for a potential future hike, aligning with a strategic approach.
  • September and October meetings show higher probabilities for rate hikes, indicating shifting market expectations.

What to Watch

Watch for the FOMC’s statement and any comments from Fed Chair Jerome Powell for indications of future monetary policy direction. Key indicators include whether the Fed indicates a readiness to hike rates if necessary, which would be supportive of a YES outcome for later meetings. Additionally, any shifts in inflation data or economic indicators could significantly impact market pricing for upcoming meetings. The Fed’s communication strategy and economic assessments during this period may provide further clarity on the likelihood of future rate adjustments.

Get live prediction-market analysis, powered by Vera. Sign up for Vera.

Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.