Market bets on the Fed's interest rate to fight inflation in November

On 14 August, speculative investors are increasingly betting that the Fed will raise interest rates again in November, as inflation levels remain higher than central bank targets. Swap market pricing is currently projected to increase interest rates by the Fed by about 45 per cent by November, up from 38 per cent before the Fed ' s interest rate resolution on Tuesday. In November 2026, inter-bank cash interest rate futures were traded in the Australian Stock Exchange derivatives market, which rose to more than three months ' high on that day, indicating increased speculative interest in the market. These bets suggest that the market is increasingly sceptical that the Australian Federal Reserve ' s austerity cycle is not over. Although policymakers have maintained interest rates this week, since inflation is still higher than the target range of 2 to 3 per cent of the Australian Federal Reserve, traders will continue to follow up on the soon-to-be-published price and employment market data to find out if there is a need for a further increase this year. Kim Xian