HomeFinancial MarketsMarket Bets on Federal Reserve Pause Rise

Market Bets on Federal Reserve Pause Rise

Investors are raising bets that the Federal Reserve will keep interest rates unchanged at its November meetings. This comes after several Fed officials, including San Francisco Fed President Mary Daly, explained that the recent rise in government bonds has acted as a rate hike itself.

On Tuesday afternoon, markets priced an 8% chance of a Fed interest rate hike in November, according to the CME FedWatch Tool. This comes after a 28.2% probability was priced last week and a 43.6% probability a month ago.

“Policymakers might take into account this additional tightening in financial conditions in the absence of further hikes,” JPMorgan chief US economist Michael Feroli acknowledged, speaking of the bond yield surge.

Further statistics expected to give cause to a rate pause include Thursday’s Consumer Prices Index, which is expected to rise 4.1% on a core basis year over year. This would be a slowdown from the 4.3% rise in August.

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