what to watch for
Federal Reserve Chair Kevin Warsh will give his first speech at the central bank’s annual symposium in Jackson Hole, Wyoming, on Friday.
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big number
40.4%. Those are the odds markets have priced in for the Federal Reserve to hike interest rates next month, according to CME Group’s FedWatch. Those odds jump through December, where odds hit 72.7%.
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key background
Inflation surged earlier this year after a conflict accelerated between the U.S. and Iran, causing oil and energy costs to spike. Warsh has said the Federal Reserve’s goal is to restore price stability, and analysts have suggested that unchanged inflation readings would likely keep the central bank from raising interest rates. After an in-line CPI report earlier this month, Morgan Stanley Wealth Management chief strategist Ellen Zentner said a “no need to hike rates” narrative was intact for the Fed. Colin Martin, Charles Schwab’s head of fixed income research, said, “When the labor market is strong and inflation is high, it’s harder to defend not hiking interest rates.”
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further reading
ForbesInflation Rose As Expected In July—But Not Enough To Force An Interest Rate Hike, Analysts SayBy Ty Roush