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Aggressive Fed Moves Back in Play as Yields Surge on CPI Shock

  • Barclays sees Fed raising rate by 75 basis points this week
  • Bond selloff continues after US CPI higher-than-expected
Bloomberg business news
WATCH: Fed Chair Powell is facing an increasingly grim calculus after yet another hot inflation reading last week. Kathleen Hays reports.Source: Bloomberg
Updated on

Investors rushed to price in more aggressive Federal Reserve rate hikes Monday as the US inflation shock continued to upend bets on peak price pressures, sending Treasury yields surging and strengthening the dollar.

With a 50 basis point hike seen as a given at the central bank’s policy decision Wednesday, market participants are awaiting its updated projections for the US economy, inflation and interest rates. Traders see 50-50 odds of the Fed raising rates by three-quarters of a percentage point in July, while Barclays Plc became the first major bank to predict such a move could even come this week.