Federal Reserve likely to go for another 75-bps rate hike this month

The Federal Reserve appears to be on a path to raise interest rates by another 0.75 percentage point this month in the wake of Chairman Jerome Powell’s public pledge to reduce inflation even if it increases unemployment. 

Investors in interest-rate futures markets saw a roughly 75 per cent probability on Wednesday that the Fed will raise rates by another 0.75 point this month, according to CME Group. 

The US labor market has remained strong this year, with employers adding 315,000 jobs in August, a robust gain. While inflation slowed a bit in July, underlying price pressures and wage growth suggest it could run well above the Fed’s 2 per cent target for some time.