Fed Fund Futures Indicate Potential Rate Hike in December

In a response to the better-than-expected July jobs report released last week, financial markets started to reevaluate the potential for a rate hike by the Federal Reserve (Fed) by the end of this year.

Following the impressive job creation figures published on Friday, the likelihood of a rate increase gained traction. On Monday, Fed fund futures indicated a probability exceeding 50%, now standing at 51.4% for a hike in December, up from 43.4% at the end of the previous trading week.

Additionally, the chances of a rate adjustment in September saw a slight increase to 18%, compared to the previous day’s estimate of 15%, according to the latest data from CME Group’s FedWatch tool.