Odds of Fed 50-Basis-Point December Hike Jump to 11% From 1.1% Before CPI
Minseung Kang
Summary
- October U.S. consumer price index (CPI) data came in above market expectations, sharply raising the likelihood of a 50-basis-point rate hike in December.
- Based on CME FedWatch, the probability of a 50-basis-point rate hike in December rose to 11% from 1.1% before the CPI release.
- The probability of a 25-basis-point increase in December was 84.7%, while the chance of rates staying unchanged was 0%. The probability of a cumulative 75-basis-point increase by January stood at 7.4%.
Forecast Trend Report by Period
A hotter-than-expected U.S. consumer price index reading for October sharply increased the odds that the Federal Reserve will raise its benchmark interest rate by 50 basis points in December.
As of November 10, CME FedWatch showed an 11% probability of a 50-basis-point rate increase in December, up sharply from 1.1% before the CPI release.
The probability of a 25-basis-point increase in December was 84.7%, while the chance of rates staying unchanged was 0%.
By January, the cumulative probability of a 25-basis-point increase stood at 43.9%, the odds of a 50-basis-point increase were 48.8%, and the probability of a 75-basis-point increase was 7.4%.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.