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Fed Traders Steer Toward a 75-Basis-Point September Rate Hike

  • September OIS contract rate briefly traded at a new high
  • Prevailing level gives about 80% odds to that outcome
Jerome Powell

Jerome Powell

Photographer: Al Drago/Bloomberg
Updated on

Traders pushed the market-implied odds of another three-quarter-point Federal Reserve rate increase in September -- instead of a smaller half-point move -- to the highest level since the central bank’s last meeting.

The peak was reached Wednesday shortly after a Wall Street Journal article suggested the larger move appeared likely. While it was only briefly sustained, the rate of the swap contract referencing the Fed’s September meeting remains about two basis points higher on the day at the highest level since Aug. 5, when strong July employment data pushed it to its previous high.