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

The Marriner S. Eccles Federal Reserve Board Building, in Washington.

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 per cent and a ​hike ⁠as early as December was seen ⁠as ​a coin ​toss, according to CME’s ​FedWatch.

Reporting By Dan Burns