Banks Bet on Fed Rate Hold as 38% Hike Odds Push Dollar to One-Month High
The Federal Reserve is expected to keep interest rates on hold this week after Bloomberg economists polled by Bank of America said the odds of a hike would be unprecedented. While a 38% probability of a quarter-point increase persisted in swap markets on Monday, banks including Citigroup and Citadel Securities are betting on the board maintaining the current benchmark rate.
The lingering probability of a surprise hike under Chairman Kevin Warsh pushed the dollar to a one-month high. Analysts anticipate a 10-2 vote split at Wednesday’s meeting, with two officials favoring a 25 basis point increase, though more than three dissents could signal a September hike. A hike with less than a 60% market probability has not occurred since 1994, and BofA sees higher oil prices as the primary inflation risk.
From the sources (24 posts)
@biancoresearch1/4 The odds of a hike at Wednesday’s meeting are 36%. At no point over the last month or two have these odds reached 50%, but again, this is fairly odd to see such uncertainty so close to a meeting.
@biancoresearch2/4 Since the financial crisis ended in June 2009, the Fed has held 135 FOMC meetings. Only four (3%) of them had enough uncertainty for the probability to be between 33% and 66% in the days leading up to the meeting.
@biancoresearch3/4 Three of them revolved around financial stress, prompting market players to wonder whether it would force the Fed to be more dovish. The fourth was September 2024, but the uncertainty was whether the Fed would cut 25 or 50, not wheth
@biancoresearch4/4 This meeting (the 136th since the financial crisis) has the probability of a hike at 36% as of this writing. But this is about the end of forward guidance. This suggests that such certainty will be the norm going forward.
@macroedgeresTrump asked on Fed this week: Prices are going down rapidly, Warsh will do the right thing #MacroEdge
@polymarketJUST IN: Trump tells Fed “we should have the world’s lowest interest rate”
@polymarket15% chance the Fed cuts rates this year.
@kalshiJUST IN: 69% chance of Fed rate "hike" this year
@businessCitigroup’s traders are betting the Federal Reserve will leave rates unchanged this week, even as the swap markets assign a more than one-in-three chance of a quarter-point hike
@barchartJUST IN 🚨: The odds of a rate hike this week have now climbed to 38% 🤯👀
@businessCitadel expects the Fed to raise interest rates this week — a surprise move strengthening Chairman Kevin Warsh’s credibility in the battle with inflation
@biancoresearchRT @business: Citadel expects the Fed to raise interest rates this week — a surprise move strengthening Chairman Kevin Warsh’s credibility…
@biancoresearchMarket pricing closed today with a 38% probability of a hike, so it is not that far from Citadel.
@stockmktnewzCitadel Securities said today that it expects Kevin Warsh and the 🇺🇸 Federal Reserve to raise interest rates this week - Bloomberg
@reutersDollar hits one-month high on lingering chances of Fed hike
@deitaoneFED DISSENTS COULD SIGNAL SEPTEMBER HIKE Investors are watching this week's Fed vote for clues on interest rates. A 10-2 split is expected, with two officials backing a 25bp rate hike. If more than three members dissent, it could signal
@unusual_whalesBREAKING: Citadel Securities said it expects the Federal Reserve to raise interest rates this week
@cnbcAnalysis: Kevin Warsh's Fed press conference will be revealing even without a rate hike
@deitaoneBOFA: JULY FED RATE HIKE WOULD BE UNPRECEDENTED BofA expects the Fed to hold rates in July, despite markets pricing a small chance of a hike. The bank says a July increase would be unprecedented, noting the Fed has never hiked since 1994
@wallstengineBofA expects 🇺🇸 Fed Chair Kevin Warsh to hold rates in July, with Logan & Hammack dissenting in favor of a hike. A hike cannot be ruled out, but history argues against a surprise. The Fed has not raised rates by more than 10bps above mar
@reutersBar to Fed rate hike this week remains high even as markets see a chance
@kalshi_financeBREAKING: Our traders forecast a 75% chance the Fed maintains interest rates — down from 96%
@unusual_whales"The Fed will hold rates in July," per Bank of America.
@bloombergtvThe Federal Reserve is widely expected to keep interest rates on hold Wednesday according to a Bloomberg poll of economists, but some say Chairman Kevin Warsh could still surprise Wall Street with a hike https://t.co