WSJ Fedwatcher speculates about a 75 basis point hike

WSJ Fedwatcher Nick Timiraos is just out with a new report previewing the FOMC.

"A string of troubling inflation reports in recent days is likely to lead Federal Reserve Federal Reserve The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the Read this Term officials to consider surprising markets with a larger-than-expected 0.75-percentage-point interest rate increase at their meeting this week," he writes.

The report is speculation but it taps into the old-style Fed leaks.

There's a spike in Fed fund futures Futures Futures or a futures contract represents a legal agreement to buy or sell a security or asset at a predetermined price at a specified time in the future. Of note, the parties are not known to each other.These transactions usually involve commodities or other securities involving the buying and selling for a forward or predetermined price.Futures also adhere to a delivery date, which specifies the date of delivery and payment. Relative to other forms of investing futures are much more complex, as Futures or a futures contract represents a legal agreement to buy or sell a security or asset at a predetermined price at a specified time in the future. Of note, the parties are not known to each other.These transactions usually involve commodities or other securities involving the buying and selling for a forward or predetermined price.Futures also adhere to a delivery date, which specifies the date of delivery and payment. Relative to other forms of investing futures are much more complex, as Read this Term implied probabilities for Wednesday's meeting coming with this, with a 57% probability of 75 bps now.

The report notes that Fed officials said their 50 bps signals were conditional on the outlook. Since then the CPI report was hotter than expected.

"That data could alarm Fed officials because they believe such expectations can be self-fulfilling," Timiraos wrote.