Rising expectations for tighter U.S. monetary policy suggest investors now see a quarter-point increase from the Federal Reserve as fully reflected in market pricing.
Market pricing shows expectations for a Federal Reserve rate increase have risen, with investors fully pricing in a 25-basis-point hike for September. The shift indicates the market now sees a quarter-point move by the Fed as the baseline scenario, a sign that expectations for tighter U.S. monetary policy have strengthened.