: Traders see 71% chance of July rate hike to a 5.25%-5.5% range after Fed skips June rate increase

After skipping a June rate hike on Wednesday, traders in Fed-fund futures traders now see a 71.1% chance of the Federal Reserve hiking rates in July, which would bring the central bank’s benchmark rate to a range of 5.25% to 5.50%, according to the CME FedWatch Tool. Stocks fell on Wednesday after the Fed left rates unchanged, as expected, but members of the rate-setting committee also signaled up to two more rate hikes of 25 basis points. The Dow Jones Industrial Average DJIA dropped about 408 points, or 1.2%, while the S&P 500 index SPX and Nasdaq Composite COMP both turned negative after the rate decision. Focus has turned to whether another 50 basis points of Fed rate hikes could tip the U.S. economy into a recession as the central bank continues its fight to bring high inflation down to its 2% annual target.

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