FILE PHOTO: The Federal Reserve building is pictured in Washington, DC, U.S., August 22, 2018. REUTERS/Chris Wattie

NEW YORK (Reuters) – Futures on the federal funds rate, which track short-term interest rate expectations, on Tuesday raised bets that the Federal Reserve will tighten monetary policy either in December 2022 or early 2023 in the wake of a stronger-than-expected U.S. consumer prices data.

The fed funds market showed a roughly 90% chance of a rate hike by December 2022, fully pricing that scenario in January 2023.

Data showed that the U.S. consumer price index increased 0.9% last month, the largest gain since June 2008, after advancing 0.6% in May.

The so-called core CPI surged 4.5% on a year-on-year basis, the largest increase since November 1991, after rising 3.8% in May.

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