world-economy

Fed Rate Hike Odds Surge to 82% as Oil Prices Spike Above $100

Traders are increasingly betting the Federal Reserve will raise interest rates in September as crude prices breach $100 a barrel. Geopolitical tensions are driving the oil spike. Fed funds futures show an 82% probability of a rate increase at the central bank's September meeting, according to CME data. The likelihood of a quarter-point hike has jumped to 38% from just 12% a week ago, despite expectations that rates will hold steady at current levels. Brent crude hit $100 per barrel Thursday for the first time since late May, pushing U.S. gasoline to $4 per gallon—the highest in over a month. Thursday's employment report showed initial jobless claims fell to 187,000 in the week ended July 18, the lowest since 1969, signaling a tight labor market. Analysts warn that rising energy costs could accelerate inflation, potentially giving the Fed more reason to tighten monetary policy.