At the end of last week, Fed funds futures were discounting an 81% chance of a 25-bps rate hike by June 2022; those odds have now risen to 97%.
The prospect of faster tapering and a rate hike sooner than otherwise expected is proving to be beneficial for the US Dollar – but hazardous for both US equity markets and gold prices. Breadth has been poor in US stock markets over the past week or so, and the latest turn in speculation around the Fed is a detrimental development near-term.