Rate hike expectations escalated dramatically throughout October. At the beginning of October, roughly two weeks removed from the September Fed meeting, markets were in a 104% chance of the first hike in December 2022; that’s a 100% chance of a 25-bps hike and a 4% chance of a 50-bps hike. Overall, the first hike was anticipated in September 2022.
Now, just ahead of the November Fed meeting, Fed funds futures are discounting an 81% chance of a 25-bps rate hike in June 2022, having pulled forward the timeline from September 2022. Rates markets have not been more aggressive on Fed tightening since the pandemic began.
Potential Bull flag.
Now, just ahead of the November Fed meeting, Fed funds futures are discounting an 81% chance of a 25-bps rate hike in June 2022, having pulled forward the timeline from September 2022. Rates markets have not been more aggressive on Fed tightening since the pandemic began.
Potential Bull flag.