Fed Hike Odds Jump to 70% as August PPI Hits 5.4% and Oil Tops $100
Updated
Updated · CNBC · Sep 8
Fed Hike Odds Jump to 70% as August PPI Hits 5.4% and Oil Tops $100
3 articles · Updated · CNBC · Sep 8
Summary
Traders lifted the probability of a Federal Reserve rate increase next week to 70% on Thursday, up from 60% earlier this week, and put December hike odds near 60%.
August producer prices rose 0.4%, pushing annual PPI to 5.4%, while U.S. crude climbed 4% above $100 a barrel as the Iran conflict deepened, reinforcing fears that inflation is becoming entrenched.
Friday's CPI report is now the last major data point before the Fed meets, with economists expecting 3.4% headline inflation and 2.4% core; Bank of America said current PPI tracking would support a hike if confirmed.
The shift adds to a broader hawkish turn after the ECB raised rates by 25 basis points and Fed officials kept emphasizing sticky underlying inflation rather than temporary energy shocks.