Stock Market Cafe
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
No Result
View All Result
Stock Market Cafe
No Result
View All Result
Home Trading News

The first Fed rate hike is now expected as early as July following the hot CPI data

by
November 10, 2021
in Trading News
0
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

RELATED POSTS

Market Update: CBRL, EIX, ZBH

A Few Comments on the Likely Government Shutdown

Traders on the floor of the NYSE

Source: NYSE

Traders in the futures markets moved up their expectations for the first Federal Reserve interest rate hike to July from September, following a hotter than expected inflation report.

“It’s a very sharp move we’re seeing the back end of 2022,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.

October’s consumer price index came in at a scorching 6.2% year-over-year, higher than the 5.9% expected.

Traders are now fully pricing in a first rate hike for September, but they are pricing in much higher odds that the Fed starts to raise rates sooner. The Fed has said it would complete tapering its bond buying program by the middle of the year, and then begin raising interest rates.

“The effective fed funds rate is currently at 8 basis points and the fed funds July contract is priced at 27 basis points,” said Boockvar. Each rate hike is assumed to be a quarter of a percentage points.

“That implies the odds are about 80% that they raise rates by July,” he said.

“Fed funds are pricing in more hikes sooner. I think it’s too much,” noted Michael Schumacher, Wells Fargo director rates.

Fed funds futures also show they now expect a second full hike by December, with the contract trading at 0.57%, noted Ben Jeffery, fixed income strategist at BMO.

Strategists are watching the move in the Treasury curve which is showing a narrowing between long end yields, like the 30-year and the shorter end, like the 5-year

“The flattening of the curve reflects more hawkish fed assumptions, also reflected in the fed funds futures market,” said Jeffery. He said the spread between the 5-year and 30-year is narrower, at 68 basis points, or 0.68 percentage points. That is the flattest since the early weeks of the pandemic in March, 2020.

A flattening yield curve can indicate that investors are worried about a weakening economy.

ShareTweetPin

Related Posts

Market Update: CBRL, EIX, ZBH

by
September 27, 2023
0

A Few Comments on the Likely Government Shutdown

by
September 27, 2023
0

Inflation Adjusted House Prices 3.4% Below Peak; Price-to-rent index is 7.4% below recent peak

by
September 27, 2023
0

Forget About ‘Timing the Market’: Schwab Research Reveals the Optimal Way to Invest

by
September 27, 2023
0

MBA: Mortgage Applications Decreased in Weekly Survey

by
September 27, 2023
0

Next Post

Gold, bitcoin lead gains in inflation hedges following biggest CPI jump in 3 decades

This inflation-fighting stock screen shows companies increasing profitability in this environment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

email

Get the daily email about stock.

Please Enter Your Email Address:

By opting in you agree to our Privacy Policy. You also agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

MOST VIEWED

  • Crocs sees fourth-quarter sales up 42%, CEO Andrew Rees says 2021 was ‘exceptional year’

    0 shares
    Share 0 Tweet 0
  • Biden didn’t accept Putin’s ‘red lines’ on Ukraine – here’s what that means

    0 shares
    Share 0 Tweet 0
  • Ford partners with GlobalFoundries to increase chip supplies

    0 shares
    Share 0 Tweet 0
  • CEOs across the market, economy agree on one big 2022 prediction: More volatility

    0 shares
    Share 0 Tweet 0
  • Inflation is sticking around – and Biden will likely have to wait it out like the rest of us

    0 shares
    Share 0 Tweet 0
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
All rights reserved by www.stockmarket-cafe.com
No Result
View All Result
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy

All rights reserved by www.stockmarket-cafe.com