Fed's rate hike probability of 100 base points in July meeting jumps to 82%

By Ovunc Kutlu

ANKARA (AA) - The probability that the US Federal Reserve will bump interest rates 100 basis points later this month jumped to 82% Wednesday after the release of key inflation data.

The probability of the rate hike stood below 1% earlier this week, as most economists and analysts were expecting an interest rate hike of 75 basis points from the central bank.

But the probability of a hike of 100 basis points climbed to almost 60% early Wednesday on Wall Street with the consumer price index coming in more than the market estimate.

The probability indicator stood at 80.9% at 3.55 a.m. EDT, according to the FedWatch Tool provided by US-based global markets company Chicago Mercantile Exchange (CME) Group.

The sudden increase came after annual consumer inflation increased 9.1% in June, much higher than the market consensus of 8.8% and after it rose 8.6% in May.

The Fed has increased its benchmark interest rate by 150 basis points since March, with 25 points that month, 50 basis points in May and a surprise 75 points in June.