Markets eye chance of full point Fed hike

June's white-hot inflation data raises the chances that the Federal Reserve could get even more aggressive — possibly hiking rates by a full percentage point in a bid to curb skyrocketing prices.

Why it matters: The reality of inflation is biting hard. But Fed hikes translate into higher borrowing costs for consumers and businesses, dampening growth even as they curb higher prices.

State of play: With the 9.1% increase in inflation, a 0.75-point increase in July is now viewed as "definite," while investors see a 1-in-3 chance of a full-percentage point increase, Bloomberg reported.

• That's based on swap contracts pegged to the fed funds rate.

What they're saying: "Everything is in play," Federal Reserve Bank of Atlanta President Raphael Bostic told reporters on Wednesday.

Yes, but: With some signs that inflation could moderate — primarily as gas prices slowly decline — the Fed may risk going too far.

• "With commodity prices falling sharply since (June) and wage growth moderating in recent months ... speculation about a 100bp hike this month looks to be misplaced," Capital Economics analysts wrote on Wednesday.