17 days ago • Posted by Paul de La Baume

EUR/USD traders price 4 rate hikes #rates #Fed #forex #markets

EUR/USD futures spread for December 2022 shows traders expect the US Federal Reserve to hike 4 times through the year, pricing a hike in March at an almost certainty. Hedging costs for Euro investors are rising as market participants increasingly bet on the Fed taking a firmer action to slowly withdraw its record monetary stimulus, in an attempt to address concerns of inflation. Similarly, the rise in the yield of the US 10 Year Treasury Note has not gone unnoticed, causing markets to whipsaw intraday yesterday. Investors are nervous that higher yields could pressure down asset prices, especially those that have benefitted most from record low interest rates.