Fed Rate Hike Odds for October Surge on Inflation Reacceleration and Middle East Tensions

Add preferred source The probability that the Federal Reserve will move to raise rates again at the October FOMC meeting has surged to roughly 70%. September's U.S. composite PMI hit 58.4, its highest level since July 2021, while the input price index also spiked sharply. Iran's stated intention to keep the Strait of Hormuz closed has reignited crude oil prices, intensifying inflationary pressure. Multiple Fed officials, led by Vice Chair for Supervision Michael Barr, have signaled the need for additional tightening. U.S. Treasury yields rose across the board, with the 5-year yield breaching 5% for the first time since 2007. A rate hike decision now appears increasingly likely just days before the midterm elections. Key Elements Federal Reserve (Fed) Federal Open Market Committee (FOMC) Michael Barr S&P Global Strait of Hormuz U.S.