The 8.2% year-over-year increase in September’s Consumer Price Index (CPI) and hotter-than-expected employment data have raised the odds of the Fed responding with a fourth consecutive 75-bps rate hike in its November meeting. The economy is expected to soon slip into a recession as the central bank continues to stay committed to its inflation-fight measures.
“The likelihood of a recession is 99.9%,” said Earl Davis, Head of Fixed Income at Bank of Montreal’s fund management division, citing that interest rates will have to rise much higher to quell inflation.
