Fed Credibility Test Looms as Market Doubts September Rate Rise
How Much Does Janet Yellen Care About the Selloff?
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Futures traders are starting to bet the Federal Reserve will put off raising interest rates. Janet Yellen shouldn’t heed them, said Kay Van-Petersen, a strategist at Saxo Capital Markets.
Contracts on the fed funds rate show traders cut the odds of a September increase by the Fed to 28 percent on Monday, from 54 percent on Aug. 7. Investors’ doubts that the Fed will tighten policy for the first time since 2006 have been fueled by a rout that erased more than $5 trillion from the value of global equities since China unexpectedly devalued the yuan on Aug. 11, and sent commodity prices to a 16-year low.