Markets Price a Possible Fed Rate Hike Driven by Energy Inflation
TL;DR Summary
Futures markets are pricing in a real chance the Fed will raise rates by year-end as energy-price shocks keep inflation elevated, contrasting with officials' expectations and the president's preferences. The CME FedWatch puts about 26% odds of a higher policy rate by year’s end, and the two-year Treasury yield around 3.9%, suggesting traders expect higher rates in coming years despite ongoing debate about the path forward.
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