Traders see a slim, but growing, chance that the Federal Reserve will surprise markets by delivering a 50-basis-point rate hike next Wednesday. They put the likelihood around such a scenario occurring at 15.9%, up from 11.5% on Thursday, according to the CME FedWatch Tool. Meanwhile, the chance of a 75-basis-point move was seen at 84.1%, down from 88.5% a day ago. The shifting odds are unusual because an aggressive 75-basis-point November hike has generally been regarded as a done deal, and investors have been more focused on the size of December’s rate move. Expectations that the Fed will likely need to ease off aggressive rate hikes soon helped to support all three major U.S. stocks in Friday afternoon trading despite a broad-based rise in Treasury yields.
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