Traders Bet the Fed Will Announce Smaller Interest Rate Hike as Economic Signals Weaken

Federal Reserve Chairman Jerome Powell speaks during a news conference on interest rates, the economy, and monetary policy at the Federal Reserve Building in Washington on June 15, 2022. Olivier Douliery/AFP via Getty Images

Investors are increasingly betting on a 75-basis-point hike by the Federal Reserve at its July meeting, after almost two-thirds had predicted an increase of 100 basis points only a few days prior.

During the week starting July 11, the markets briefly anticipated that the central bank would raise interest rates by a full percentage point.