Fed's Daly Floats More Hikes as Firms Push Costs Onto Shoppers

Federal Reserve President Mary Daly said inflation pressures are intensifying and that firms are increasingly handing higher costs to consumers. She voiced comfort with the Fed's September rate increase and suggested more tightening might be required to keep inflation in check. Her comments point to stubborn price pressure that the central bank is still trying to contain.

Traders are listening. The market asking whether two Fed rate hikes will happen in 2026 has swung hard, with the probability of a second increase now at 89.5%, up from 66% a week ago, according to Crypto Briefing. That pricing lines up with Daly's read, even after the Fed left rates steady in October.

The backdrop is fresh inflation data: the Consumer Price Index rose 0.4% month-over-month in October. Market participants appear to be reading Daly's remarks as a signal that the Fed will keep its restrictive stance to manage inflation expectations.

Next up, the December FOMC meeting takes center stage. Any hint of further tightening there could lock in current market pricing, and upcoming Fed speeches or new inflation readings could shift expectations again.