---
title: "Will the Fed Pull the Trigger on a Pair of Three-Quarter Point Hikes?"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/63420859.md"
description: "What Happened? That's an enormous jump from 23.2% yesterday to 95.5% today. The jump on June 10 from June 6 is understandable given the horrific CPI report. But that only took the odds to 23.2%. Given this is a Fed quiet period it's not due to official Fed yapping. A leak? JPMorgan ..."
datetime: "2022-06-14T01:14:41.000Z"
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  - [en](https://longbridge.com/en/news/63420859.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/63420859.md)
---

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# Will the Fed Pull the Trigger on a Pair of Three-Quarter Point Hikes?

Rate hike odds from CME Fedwatch

**What Happened?**

That's an enormous jump from 23.2% yesterday to 95.5% today.

The jump on June 10 from June 6 is understandable given the horrific CPI report. But that only took the odds to 23.2%. 

Given this is a Fed quiet period it's not due to official Fed yapping. A leak? JPMorgan yapping? 

Regardless, here we are at +0.75 percentage points with the Fed having penciled in +0.50 percentage points. 

**Target Rates Probabilities for July** 

_Rate hike odds from CME Fedwatch_

Looking ahead, the market bumped up the odds of a 75 basis point hike in July as well. 

Let's look even further ahead.

**Target Rate Probabilities December**

_Rate hike odds from CME Fedwatch_

The median expectation is for the Fed Funds rate to be 3.75-4.00% in December.

Wow. It will be massive stagflation and stock market carnage if that is even in the ballpark. 

**Over Twenty Million Households Struggle to Pay Energy Bills**

Meanwhile, Over Twenty Million Households Struggle to Pay Energy Bills, and it will get worse. 

If we even get to 3.0% I think the Fed will already overshot neutral. 4.0% could start a second "Great Recession". 

**Where's Neutral?** 

**In Search of Neutral**

For discussion of "neutral" please see The Fed Searches For the Neutral Interest Rate, Where the Heck Is It?

Based on the CPI and Fed recent talk, I now expect that rarest of rare Fed policy error, tightening too much. 

This post originated at MishTalk.Com.

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