FED will announce its interest rate resolution on June 15. It is very likely that FED will raise interest rates by 75 basis points in June and July, according to CME FedWatch Tool.
Due to the market's concern that the Federal Reserve will issue a super hawk signal this week, the three major US stock indexes collectively fell sharply on Monday, June 13. The Dow fell more than 870 points, and the S&P 500 fell into a bear market.
Last Friday, once the inflation growth rate in May, which reached a 40 year high, was announced, the market's expectations for the hawkish interest rate hike of the Federal Reserve rose sharply. Barclays became the first investment bank on Wall Street to call for the Federal Reserve to raise interest rates by 75 basis points at this week's FOMC meeting. Jeffrey, an investment bank, later made similar expectations.
Steven Englander, head of global foreign exchange research and North American macro strategy of Standard Chartered Bank, made even more surprising remarks. Although his team predicted that the Federal Reserve would still raise interest rates by 50 basis points at its June meeting, he pointed out that the possibility of raising interest rates by 75 basis points or even 100 basis points was not ruled out.
The panic in the market was thus even stronger. According to CME FedWatch Tool, the probability that the Fed will raise interest rates by 75 basis points on June 15 soared by nearly 100% at one time.