Fed-funds futures traders rapidly readjusted their expectations for the size of Federal Reserve’s next rate hike on July 27, by boosting the likelihood of a 100 basis point hike to 67% after Wednesday’s hotter-than-expected consumer price index data for June. That’s up from 7.6% on Tuesday, according to the CME FedWatch Tool, and would lift the fed funds rate target to between 2.5% and 2.75%. The chance of a full percentage point hike continued to rise aggressively as Wednesday’s trading session wore on. Meanwhile, traders see a shrinking likelihood of a 75 basis point rate hike in two weeks, at 33%, down from 92% on Tuesday.
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