Tausi Insider

The Federal Reserve is seen slowing the pace of its rate hikes after a government report showed consumer prices rose less than expected last month, an indication that the central bank’s aggressive policy tightening this year has begun to bite. The Fed has raised rates more sharply this year than at any time since the 1980s to battle high inflation, delivering a fourth straight 75-basis point rate hike last week that brought the policy rate to a 3.75 per cent-4 per cent range. It was near zero in early March. Futures contracts that settle to the Fed’s benchmark rate now show traders expect that blistering pace of policy tightening to slow next month, pricing in about an 80 per cent chance the Fed will deliver just a half-point rate hike. The Fed is then seen shifting to quarter-point hikes in January, with the policy rate ultimately peaking in the 4.75 per cent-5 per cent range by March. Before the report traders had expected the Fed to raise rates above 5 per cent by then The consume...