Courtesy of Mish.
In the wake of an allegedly “welcome” increase in inflation, the market is starting to price in increasing odds of rate hikes – not many, and not fast, but there are very noticeable changes.
The Fed starts a two-day meeting tomorrow. Its interest rate decision comes Wednesday. Despite the talk of a hike tomorrow, the Fed would never surprise with hikes.
March 16 Meeting Odds
Other than the 96% chance of the Fed doing nothing, there is nearly a 4% chance of a cut. A cut won’t happen.
June 15 Meeting Odds
By June, the odds of a rate hike are nearly 50%. Moreover, the odds of two hikes are 8.2% vs. the odds of a cut of 1.9%.
