- Eroding inflation data has opened the door to a three-quarter-percentage point interest rate increase.
- Fed officials had earlier said they were considering a second straight half-point rate increase at the June 14-15 policy meeting.
- Traders are betting on a three-quarter-point increase, a first hike that large since November 1994.
Eroding inflation data and fast-changing views in financial markets on Monday have opened the door to a larger-than-expected three-quarter-percentage point interest rate increase when Federal Reserve officials meet this week.
It is a move officials had downplayed as their two-day meeting approached over recent weeks, but which they now may be poised to adopt in response to data that has yet to show progress on taming the pace of price increases. The growing possibility of a surprise move was reported earlier on Monday by the Wall Street Journal, helping to further push trade in future contracts tied to Fed policy in that direction.