Markets push back next Fed rate rise to October after hot inflation reading

Financial markets are now pricing in October as the most likely timing for the Federal Reserve's next interest rate increase, after fresh inflation data came in stronger than expected and renewed concerns about persistent price pressures in the United States.

S&P Global's overall inflation measure rose to its highest level since October 2022, a reading that has sharpened expectations that the central bank will need to act again before the year is out.

Comments from Federal Reserve Vice Chair Michael Barr added to the sense that policymakers remain alert to upside inflation risks, reinforcing the case for at least one further rate hike. Investors have adjusted their positions accordingly, pushing the anticipated timing of any move deeper into the autumn.