Gundlach Says Fed Should Raise Rate to 3% on Wednesday

Reuters

Yields hit decade highs before expected 75 bp Fed rate hike

U.S. Treasury yields climbed to their highest levels in a decade on Tuesday as investors raised bets that the Federal Reserve will hike rates by 75 basis points when it concludes its two-day meeting on Wednesday. Fed funds futures traders are now pricing in an 87% chance of a 75 basis point increase on Wednesday, and a 13% chance of a 50-basis-point increase. Economists upped their rate hike forecasts after a Wall Street Journal article on Monday said that Fed officials would consider a 75 basis point hike, which was interpreted as being an informal communication by the U.S. central bank.