FOMC Preview: I'm Hoping For A 25 Bps Rate Hike

Fed funds futures price an ~88% chance of a 25 bps hike. The move is already largely priced in. The real question is whether 25 bps is an insurance hike or the start of a new tightening cycle. A hike may be the best outcome if it protects Fed credibility and keeps long-term Treasury yields contained. The key risk is a hawkish path that pushes the 10-year above 5% and pressures long-duration equities. Win McNamee/Getty Images News The Hike Is Already Priced In Let's start by assuming that the Fed will probably raise rates on Wednesday. Or at least, that’s what the markets are thinking at the present time. The positive aspect is that the