Fed Rate Hike Odds Surge to 90% After Sharp Monthly Jump in Core Prices

Markets are now pricing roughly a 90% chance of a Federal Reserve rate hike after a sharp monthly increase in core prices.
The move marks a major shift in expectations as investors reassess how much inflation pressure is still running through the U.S. economy.
Core inflation matters because it strips out more volatile food and energy components and is closely watched for signs of persistent underlying price pressure.
A stronger-than-expected monthly increase gives the Fed less room to stay patient and raises the risk that policy needs to tighten again.
That repricing is likely to keep upward pressure on Treasury yields while weighing on rate-sensitive assets.
For $SPX and $QQQ, the key risk is that higher-for-longer expectations turn into an actual hike and push discount rates even higher.
The next major question is whether the Fed validates the market’s aggressive pricing or pushes back against it.