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‘They Should Do 100’: Wall Street Debates the Fed’s Next Rate Move

  • ‘Markets would hate it’ versus ‘the market might rally’
  • 100-point basis move would ‘reinforce credibility’: Summers
Bloomberg business news
WATCH: BofA’s Mark Cabana says the Fed may “overdo it” on rate hikes.Source: Bloomberg
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Tuesday’s unexpectedly hot inflation reading virtually assured markets that the Federal Reserve will raise rates by 75 basis points next week. Wall Street then began to weigh the chance that the Fed might make a more dramatic statement.

The odds for a 100 basis point rate hike jumped more than 20% after the consumer price index showed an increase from July. With hopes of a “Fed pivot” firmly dashed, the S&P 500 Index tumbled as much as 3.2%.