No ands, ifs or buts about it.
https://preview.redd.it/r27weyokleph1.png?width=1835&format=png&auto=webp&s=c4a65c6772dbef943d3a450ba427db1bc5235b59
It was already knocking on the door of needing a hike at the July meeting, but the Fed also has a history of doing nothing at the July meeting if the previous few meetings were pauses. They'd rather kick the can down the road to September, have their Jackson Hole meeting and whatever.
This setup on tradingview makes it pretty easy to see. Average of the 1 month and 3 month T-bills, subtract the current EFFR and you have about how much the Fed needs to change rates at the next meeting usually. There are odd exceptions, you can see there was a meeting or two in 2023 where this formula was negative, but they still hiked--that was the short end moving a lot because of the SIVB collapse and such.
Barring any unusual crap like that happening, this formula is pretty good at predicting what's going to happen--or at the very least what the market is telling the Fed what they feel needs to happen.
This should spice things up in the market considerably. It's happening the same day as the major monthly VIX options expiration. The large SPX 3rd Friday AM monthlies expire shortly thereafter--which will see several long gamma positions disappear from market makers' books. 7700 is the largest MM long strike within Friday's straddle price. Its influence greatly diminishes after the Friday AM expiration.
Some guys have been pounding the table on getting long October vol in some way or another since August, they just may get proven right starting this week finally--then again it did start climbing in earnest last week. Expect more this week.
Then, maybe big time vol compression post election--guess we'll see the Prez' real meaning behind how he thinks the Iran situation ends then, too...