The probability of a higher rate hike by the US Federal Reserve during a meeting next month skyrocketed Thursday after US consumer inflation climbed to record levels. 

The possibility of a 50 basis points hike soared to 92.8% at 4.30 p.m. EDT, according to the FedWatch Tool provided by US-based global markets company, Chicago Mercantile Exchange (CME) Group.

While the probability climbed further to 94.7% at 5 p.m. EDT, it stood at 46.3% at 9.30 a.m.

The Fed is expected to announce a rate increase after its two-day meeting on March 16.

The probability of an increase of 25 basis points fell to 7.2% from 53.7%, according to CME Group. It further declined to 5.3% at 5 p.m..

The sudden change came as US consumer prices in January soared to 7.5% year-on-year, marking the largest 12-month increase since February 1982, according to the Labor Department.

Investors are expecting the Fed to make faster and higher rate hikes this year to tame record inflation.

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