With Brent crude at $107.82 and inflation running hot, the Federal Reserve faces mounting pressure to hike rates, as markets pivot from expecting cuts to bracing for a sustained period of tightening.
WTI crude above $100 after attacks on Saudi energy infrastructure, fueling inflation and rate hike expectations.
Brent crude reached $107.82, contributing to higher inflation and reducing the likelihood of Fed rate cuts.
CME's FedWatch tool is cited as showing 90.7% probability of a rate hike, but no direct impact on CME's business.
Markets now assign a 90.7% probability to a Federal Reserve rate hike this Wednesday, a sharp reversal from earlier expectations of rate cuts. Persistent inflation, which sits 140 basis points above the 2% target, combined with surging oil prices and robust August payroll growth, has forced a hawkish shift in policy outlook.
Markets are reacting to inflation remaining 140 basis points above the 2% target, a strong August jobs report, and rising energy costs that threaten to further accelerate price growth.