Fixed income futures now put a September rate hike at the center of the outlook, with rising Treasury yields, a rare cluster of dissents, and increasingly hawkish Fed commentary all pointing to a shift after July’s hold.

Although the Federal Open Market Committee has moved away from forward guidance, there are several clues that a hike may be coming. These include rising bond yields, recent hawkish speeches, three July dissents from Fed policymakers and energy pricing remaining generally elevated.

In addition, Fed Chair Kevin Warsh has repeatedly asserted that inflation needs to be lower to hit the FOMC’s targets, perhaps implying a need for higher interest rates to achieve that.

Bond Yields Push Higher

Perhaps the most fundamental clue to potential higher rates is that bond yields are rising. The 10-year Treasury yield has stepped up sharply to almost 4.7%, up from........

© Forbes