The interest rate market reacted lackluster to PPI data that exceeded expectations. Despite further signs of high inflation, borrowing cost expectations for the next few months have hardly changed, which is basically the same as Wednesday's level. After briefly pricing the possibility of three rate hikes, traders re-anchored expectations of two rate hikes in March. Currently, the probability of raising interest rates in October is still less than 50%, but Federal Reserve Chairman Kevin Walsh's upcoming speech at the International Monetary Fund meeting in Bangkok may be a key variable in changing this expectation.

The interest rate market reacted lackluster to PPI data that exceeded expectations. Despite further signs of high inflation, borrowing cost expectations for the next few months have hardly changed, which is basically the same as Wednesday's level. After briefly pricing the possibility of three rate hikes, traders re-anchored expectations of two rate hikes in March. Currently, the probability of raising interest rates in October is still less than 50%, but Federal Reserve Chairman Kevin Walsh's upcoming speech at the International Monetary Fund meeting in Bangkok may be a key variable in changing this expectation.