The Odds of the Fed Ramping Up Its Rate-Hiking Cycle Are Skyrocketing, and 4 Variables -- 2 Directly Tied to President Donald Trump -- Are to Blame
There’s now a 96% chance that Fed Chair Kevin Warsh and the Federal Open Market Committee (FOMC) will raise interest rates at least once by Jan. 27, 2027.
Overview
It's been a history-making year for Wall Street. We've watched the Dow Jones Industrial Average (DJINDICES:^DJI), S&P 500 (SNPINDEX:^GSPC), and Nasdaq Composite (NASDAQINDEX:^IXIC) vault to new highs and witnessed the largest-ever initial public offering. But most importantly, we saw Kevin Warsh become only the 17th head of the central bank on May 22.
On Sept. 16, Fed Chair Warsh and 11 other Federal Open Market Committee (FOMC) voting members kicked off only the fourth rate-hiking cycle of the 21st century. The FOMC raised interest rates 25 basis points to 3.75%-4.00% to combat persistently elevated inflation.
Details
According to the CME Group's (NASDAQ:CME) FedWatch Tool, which tracks the odds of future rate hikes/cuts using the 30-day Fed Funds futures prices, as of Aug. 25, there was 64.4% chance that interest rates would remain unchanged at 3.50%-3.75% or tick up a quarter point to where they are now by the Jan. 27, 2027, FOMC meeting.
Source
Originally published at www.fool.com.