Central Banks
Fed’s 75-or-100 Choice Keeps Traders Guessing as Decision Nears
- Economists generally view a 75 basis-point hike as most likely
- Financial futures markets show modest chance of a bigger move
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Federal Reserve officials could find reasons for raising rates by a full percentage point next week if they decide to look hard enough, though the base case still looks like 75 basis points.
While most economists see the smaller -- but still aggressive -- hike as the most likely outcome of the central bank’s Sept. 20-21 meeting, a blockbuster move is not a zero risk in the aftermath of a hot reading on August core consumer inflation. Investors ascribe around 24% odds it could happen, according to pricing in interest-rate futures, and some Fed watchers view the probability as higher.