Prediction markets put October Fed hike odds above 56%

Rate cuts are no longer the default bet for October. Prediction markets now put the chance of another 25-basis-point Fed hike at roughly 56% to 58%, reversing earlier expectations for cuts and putting the next move narrowly on the tightening side.

The repricing follows reports that inflation is again running ahead of wage growth. Bank of America told investors to prepare for the risk that the Fed pushes its benchmark rate above 5%.