March Fed Hike in Play for Traders After Inflation Surge: Chart

A March interest-rate increase by the Federal Reserve, an unlikely scenario just days ago, is now suddenly on the table after an unexpectedly strong inflation print and hawkish testimony from Fed Chair Janet Yellen to Congress. Derivatives traders are pricing in a 42 percent probability that the Fed raises rates at its March 14-15 meeting, up from 24 percent on Feb. 6. That’s based on the assumption that the effective fed funds rate will trade at the middle of the new FOMC target range after the next increase.

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