Economics
Traders Are Counting on a December Fed Hike — Unless Trump Wins
- Probability of 2016 increase, now at 76%, may fall to 20%: TD
- Analysts see more uncertainty, equity declines if Trump wins
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The path to Federal Reserve policy tightening this year has one final hurdle to clear: a potential Donald Trump victory in the U.S. presidential election.
The stage appears set for an interest-rate hike next month at the Fed’s last meeting of 2016. Domestic economic data this week, including an acceleration in wage growth, support a move in December. In its Nov. 2 statement, the Fed’s policy committee said the case for higher borrowing costs had strengthened amid a pickup in the pace of inflation. Traders assign about a 76 percent probability of a rate hike by year-end, according to futures data compiled by Bloomberg.