Investors Bet on Higher Rates as U.S. Inflation Firms

Investors Bet on Higher Rates as U.S. Inflation Firms

Investors are bracing for a period of consistently higher inflation, lifting bets that the Federal Reserve will deliver a fourth interest-rate increase this year as an intensifying trade spat between the U.S. and China threatens to add to mounting price pressures. Federal-funds futures, which investors use to bet on central bank policy, on Thursday showed a roughly 60% chance that the Fed will raise rates at least four times this year, according to CME Group data. That marks one of the highest levels this year and compares to a 35% probability at the start of June. Increasing confidence in the Fed’s plans for tightening policy come as measures of price growth for both U.S. consumers and businesses rise at their fastest pace in years.

 

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