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Market Expectations for July Fed Rate Hike Rise to 50%
July 14, 2026 at 05:57 AM
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Probability of a quarter-point rate increase at the Federal Reserve's July meeting has climbed to about 50% from below 10%, fueled by official comments and ahead of inflation data.
- Fed Governor Christopher Waller said a near-term rate hike should remain an option if core inflation posts a new high reading.
- Two-year Treasury yields held above 4.25% on Tuesday, widening the gap above the federal funds rate.
- Portfolio manager Ed al-Husseini of Columbia Threadneedle said the possibility of a July hike is now on the table and more likely than not.
- Short-term interest rate markets have priced in a full rate increase by year-end, with a potential additional hike by mid-2027.