Fed rate hike process may get breather as inflation data showed some positive results
The chances of the US Federal Reserve increasing interest rates 75 basis points in September dropped to 37% on Wednesday when consumer inflation data slowed.
The probability of an increase in the basic point rate of 75 points was 68% Tuesday before the publication of key inflation data, according to the Fed watch tool provided by the US-based Global Markets Company Chicago Mercantile Exchange (CME).
American consumer inflation increased by 8.5% in July, decreasing the annual gain of 9.1% in June, which was the highest year-on-year increase in more than 40 years, according to the figures of the Department of Labor published earlier Thursday.
The Fed has increased its benchmark interest rate by a total of 225 basis points since March: 25 points that month, 50 basis points in May, 75 points in surprise in June, and 75 other points in July.
Monetary tightening of the central bank and the cycle of aggressive interest rate increases to tame high inflation seem impressive because the increase in consumer prices slowed down in July.
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This led investors to suspect that the Federal Open Market Committee (FOMC) could start to brake at the end of its two-day meeting from September 20 to 21.
We now expect the FOMC to operate less for a 75 -point hike on September 21. Fed rate hike process may get breather.
On Wednesday, the probability of an increase of 50 base points rose to 63%, up from 32% on Tuesday.