Traders price 67% odds of a September Fed rate hike after Warsh
What's new: July hike odds jumped to about one-in-three, while stocks initially fell and 2-year Treasury yields surged.
Financial markets swung after Federal Reserve Chairman Kevin Warsh struck a hard line on inflation, pushing traders to price in a 67% chance of a rate hike by September. CME FedWatch data also showed the odds of a July 28-29 increase climbed to about one-in-three after Warsh told reporters the Federal Open Market Committee was “unambiguous and unanimous” about delivering price stability. The 2-year Treasury yield jumped as he spoke and stock indexes fell before recovering Thursday. The shift undercut expectations that Warsh, tapped by President Donald Trump, would favor easier policy despite inflation running above the Fed’s 2% target for five years.