TREE NEWS reports: US core inflation came in above expectations, prompting traders to raise bets on Federal Reserve rate increases. Interest-rate swaps now show markets pricing a 90% probability of a hike next week and fully discounting two increases by year-end. Traders expect persistent price pressure could force policymakers under Fed Chair Kevin Warsh to act.
US Core Inflation Tops Forecasts; Market Prices 90% Odds of Fed Hike Next Week
AI take
The move matters less for the headline beat than for what swaps now imply: a near-certain hike next week and two fully priced by year-end, a repricing that removes the easing optionality risk assets had leaned on. The signal is that traders see persistent price pressure as binding on a Warsh-led Fed, narrowing the room for crypto and RWA markets to rally on macro tailwinds. Whether that pricing holds into the meeting, or fades if the data softens, is the open question.
Generated by AI for reference only.
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