Barclays warns summer volatility may persist as September Fed hike odds rise

Key Facts

As market speculation intensifies over a potential Federal Reserve rate hike at the September meeting, Barclays has warned that summer volatility could persist, according to reports. The warning comes amid rising bets on tighter US monetary policy, keeping investors on edge.

Barclays' statement follows resilient US services data, with the S&P Global Services PMI printing at 51.3 in June, above forecasts, while the Composite PMI reached 52.2, reinforcing the case for a hawkish Fed. This coincided with a higher-than-expected Canadian inflation rate of 3.2%, supporting a global tightening narrative.

Traders are now eyeing further Fed commentary following Governor Waller's recent speech, expecting heightened volatility in the weeks ahead of the September meeting. Analysts suggest that persistent strong economic data could push the Fed to hike, keeping markets attentive to any new developments.