The chances of a quarter-of-a-percentage point rate hike by the Federal Reserve next February jumped to 58.1% after November’s consumer-price index report, up from 35.1% a day ago. Such a hike would be the smallest move since March. The CPI data also further solidified the likelihood that Wednesday’s Fed rate hike would be a half-point increment, lifting the fed funds rate target to between 4.25% and 4.5%. Meanwhile, traders see an increased likelihood that the Fed policy makers will either pause or deliver another quarter-point hike next March. U.S. stock futures moved higher in response to the inflation report.
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