Wall Street Banks Expect Fed to Raise Rates by 25 Basis Points Wednesday

More than 10 major Wall Street banks, including Goldman Sachs, JPMorgan and Morgan Stanley, expect the Federal Reserve to raise interest rates by 25 basis points at its meeting on Wednesday, September 16. According to the CME FedWatch tool, markets are pricing an 87.3 percent probability of the hike. A similar tool on Investing.com showed a 91.8 percent probability of the rate reaching the 3.75 to 4 percent range as of 11:35am ET on Tuesday, September 15, up from 89.5 percent the previous day. A 0.3 percent rise in core consumer prices in August and oil climbing back above 100 dollars have also pushed banks such as Barclays, Citigroup and Bank of America toward expecting tighter policy. Kevin Warsh, a former Federal Reserve governor, had earlier warned at the Jackson Hole symposium that more action would be needed if underlying inflation did not return to target quickly.