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Inflation Numbers Have Traders Predicting 110-bp Rate Hike from the Fed 

Inflation reached a 41-year high in June, as the Consumer Price Index rose 9.1% year-over-year, beating the Dow Jones estimate of 8.8%. The news moved traders to predict a 100-basis-point increase in the federal funds rate at the July meeting of the Federal Reserve’s Federal Open Market Committee later this month. 

As of late Wednesday afternoon, traders’ expectation of a 100-bp increase from the Fed rose to 75%, putting the federal funds rate in a range of 2.50% to 2.75%, according to CME Group’s FedWatch Tool. A day earlier, traders gave a 75-bp rate hike a 92.4% probability. 

“U.S. inflation is above 9%, but it is the breadth of the price pressures that is really concerning for the Federal Reserve,” James Knightley, ING’s chief international economist, told CNBC. “With supply conditions showing little sign of improvement, the onus is the on the Fed to hit the brakes via higher rates.” 


Inside The Story

CME Group

About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

  • ◦Financing
  • ◦Economy
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