Courtesy of Mish.
Rate Hike Odds Shift to December
The Fed has been trying for months to convince the markets that rate hikes are coming in September. On Thursday the market took another look and came around to my point of view “I’ll believe it when I see it”.
CME FedWatch 2015-08-18
CME FedWatch 2015-08-20
Rate Hike Odds
The CME concludes there is a 23.57% chance of a hike. This is bad math because the CME ignores ranges.
If the Fed comes flat out and sets a target rate of precisely 0.25% that is a hike from here.
The current Fed stance is 0.00% to 0.25% and the actual rate has been about 0.14%. Thus 0.25% would be a hike of roughly 1/8 point (0.125 percentage points).
That said, it is certainly debatable if we see even that much of a hike. A look ahead at action in the CME Fed Fund Futures shows why.
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