I will probably add more $DRV (3x Real Estate Short) thinking about this: a 1.0% rate raise would crush housing and corporate debt. This is going to be interesting going into this election cycle:
Bloomberg headline: Fed Could Weigh Historic 100 Basis-Point Hike After Inflation Scorcher
Futures show one-in-three chance of super-sized July move
75 basis points now also in play for Fed’s September meeting
July 13, 2022, 2:59 PM UTC
Federal Reserve officials may debate a historic one percentage-point rate hike later this month after another searing inflation report, which cemented odds on a 75-basis point move and was seen keeping the same again on the table for September.
Investors upped bets the central bank could raise rates by 100 basis points at its July 26-27 meeting – which would be the largest increase of the modern Fed era – with futures pricing a one-in-three chance after consumer prices rose a hotter-than-forecast 9.1% in the year through June.
“I think they have time, if they want, to change that expectation to 100. I don’t think they’ve given us a great reason why they should be going slow here, or being gradual,” said Michael Feroli, chief US economist at JP Morgan Chase & Co.