Futures traders cut odds of December Fed hike to 70%
Futures markets now see a 70% chance of a rate increase at the Fed's December meeting, down from over 80% earlier this week. The Federal Reserve kept its benchmark rate in the 3.75%‑4.00% range last week, and Cleveland Fed president Beth Hammack and Governor Lisa Cook voted for a hike at that session. Richmond Fed chief Thomas Barkin warned that inflation remains too high, supporting gradual tightening. Analysts at Evercore ISI note that a slowdown in AI‑related capital spending could reduce pressure for further hikes.
Key facts
- Hammack said monetary policy must become restrictive to bring inflation back to 2%.
- Barkin emphasized that inflation is still too high and gradual hikes are sensible.
- Futures traders reduced the December hike probability from over 80% to about 70%.
- Evercore ISI expects AI capital spending to slow over the next one to two years.
- The Fed's benchmark rate remains in the 3.75%‑4.00% corridor.
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Why it matters
The shift in hike odds influences borrowing costs and market expectations.
What changed
First published from CNBC and The Economic Times