Hawkish statements from several prominent Fed officials as well as increased optimism for economic growth are pointing to a strong possibility for a March interest rate hike.
Probability that the Federal Open Market Committee will approve an increase at its March 14-15 meeting zoomed to 69 percent Wednesday morning, about double what it was the day before, according to the CME. Other gauges cited by market watchers point to a greater than 80 percent chance.
Just last week, the market was pricing in less than 1 in 5 odds that the FOMC would move.
Stocks were pointing to a sharply higher open on Wall Street, while government bond yields surged as well. The benchmark 10-year note stood near 2.47 percent, its highest level in two weeks.
The expectations shift comes amid a flurry of Fed-speak. New York Fed President Bill Dudley, Philadelphia’s Patrick Harker and Robert Kaplan of Dallas each made statements Tuesday indicating that a hike was looming.
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