Markets price in 91% chance of Fed rate hike in December
Rising energy prices in the United States and their impact on inflation continue to reshape market expectations for the Federal Reserve's (Fed) monetary policy.
According to futures market pricing, the probability of a Fed interest rate hike at its October 27–28 meeting stands at approximately 15%, while the likelihood of a rate increase in December has reached 91%.
The rise in oil prices driven by conflicts in the Middle East has intensified concerns that US inflation could remain elevated. This has reinforced expectations that the Fed may pursue tighter monetary policy rather than move toward interest rate cuts. Investors are now focused on next week's Personal Consumption Expenditures (PCE) inflation data and the signals the Fed will provide at its October meeting.
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