Markets begin eyeing a Fed rate hike around the turn of the year

Reuters //May 15, 2026//

Renovations continue at the Federal Reserve Board building in Washington, D.C., U.S., November 14, 2025. REUTERS/Elizabeth Frantz/File Photo

Reuters //May 15, 2026//

May 15 (Reuters) – Interest rate futures prices fell sharply on Friday, reflecting a growing conviction among bond market investors that stiff inflation will push the U.S. Federal Reserve to raise interest rates late this year or in early 2027.

The probability that the Fed’s benchmark interest rate would be 25 basis points higher by January’s Federal Open Market Committee meeting were up to around 60% and a hike as early as December was seen as a coin toss, according to CME’s FedWatch.

(Reporting By Dan Burns)

Tags: bond market, interest rate futures, inflation, Federal Reserve

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