Citigroup forecasts 100-basis point Fed rate hike in July

Citigroup expects that the Federal Reserve would hike the interest rate 100 basis points (bps) in July, in light of the latest inflation data.

The Open Market Committee stated, at the last month’s meeting, that it would react based on inflation data each month, Fed economists said in a note to customers.

Traders fully price a 75-basis-point hike at the Federal Reserve’s July meeting after the inflation surged to 9.1% in June, its highest level since 1981.

The US central bank has raised the interest rates three times since year-start, last of which was 75 points in June.