Expectations for a Fed rate hike in December are basically established, with the market betting on further hikes in January and March next year.

BlockBeats news, November 14 - Federal Reserve officials intensively issued hawkish remarks this week, basically establishing the market's expectation of a 25 basis point rate hike in December and further opening up the possibility of consecutive rate hikes in January next year. US October CPI showed accelerating inflation and broadening price pressures, and the year-on-year increase in October wholesale prices also rose to the highest level since 2022, further reinforcing the case for rate hikes.

New York Fed President Williams said inflation remains too high, Chicago Fed President Goolsbee said the latest data are concerning, Dallas Fed President Logan said rates may need to rise faster than previously expected, and Fed Governor Waller raised the possibility of a 50 basis point rate hike next month. The market has now priced in 25 basis point rate hikes in December, January next year, and March, whereas previously it had only expected hikes in December and March next year.

Bank of America has incorporated rate hikes at all of the next three meetings into its forecasts, while Santander expects hikes in December and March next year. However, officials still differ on the pace of rate hikes, with some advocating gradual, small increases. Boston Fed President Collins said the direction of further policy tightening is clear, but she is unwilling to prejudge the magnitude and speed of rate hikes.

Rising rate hike expectations have pushed up US Treasury yields, but factors such as weakness in the housing market, the possibility that AI investment returns falling short of expectations could trigger stock market declines, and future declines in energy prices remain variables that the Fed needs to consider in its decision-making.