78% chance of Fed hike at Dec meeting - CME Group's FedWatch


Following comments from both Yellen and Fed's Bostic, Federal Funds Futures imply traders see a 78% chance of a Fed hike at Dec meeting according to CME Group's FedWatch

Yellen's comments:

  • Gradual approach to hikes particularly appropriate in light of subdued inflation, low neutral rate
  • Imprudent to leave rates on hold until inflation reaches 2%
  • Can still achieve 2% target goal even if fed is underestimating slack or overestimating inflation expectations
  • Low inflation likely due to transitory factors, sees many uncertainties
  • Downward pressure on inflation could prove unexpectedly persistent
  • Considerable' odds that inflation won't stabilize at 2% over next few years
  • Risk that inflation expectations are not as well-anchored as they appear
  • Data suggests labour mkt is healthy, without substantial slack & not overheated
  • Evidence on labour mkt not definitive, says Fed must be 'open-minded'

Bostic's:

  • Even after hurricanes, above 2% GDP expectation is reasonable
  • Pace of job creation in the US remains strong
  • Not overly concerned about asset price bubbles
  • Want "clear evidence" inflation is rising to Fed's 2 percent target
  • Attributes recent low inflation to remaining weakness in labor market, sign recovery is continuing
  • Weak wages also a sign that slack remains in the labor market
  • Do not regard monetary policy as "too loose" for current economic conditions or that it is feeding asset bubbles
Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD bears attack 0.6600 after mixed Chinese data

AUD/USD bears attack 0.6600 after mixed Chinese data

AUD/USD has resumed its bearish momentum, challenging 0.6600 in Monday’s Asian session. After being hit by downbeat Australian Job Ads and Chinese Home Prices data, the pair feels another pinch from mixed China activity data and a cautious risk tone. 

AUD/USD News

EUR/USD consolidates around 1.0700, just above one-and-a-half-month low touched on Friday

EUR/USD consolidates around 1.0700, just above one-and-a-half-month low touched on Friday

EUR/USD struggles to build on Friday’s bounce from its lowest level since early May. Political uncertainty in Europe continues to undermine the Euro and cap the upside. The Fed’s hawkish outlook acts as a tailwind for the USD and favors bearish traders. 

EUR/USD News

Gold attracts some sellers below $2,350, eyes on Eurozone political concerns

Gold attracts some sellers below $2,350, eyes on Eurozone political concerns

Gold price trades on a softer note near $2,325 during the early Asian trading hours on Monday. The speculation that US interest rates will stay higher for longer, with the median projection from Federal Reserve officials calling for one interest rate cut this year, has lifted the Greenback broadly.

Gold News

Bitcoin active addresses hit lowest level in five years, BTC ranges below $67,000

Bitcoin active addresses hit lowest level in five years, BTC ranges below $67,000

Bitcoin, the largest asset by market capitalization, has noted a decline in its active address count per data from Glassnode. A decline in active addresses is typical at a time during a surge in Bitcoin transaction fees.

Read more

Week ahead: RBA, SNB and BoE next to decide, CPI and PMI data also on tap

Week ahead: RBA, SNB and BoE next to decide, CPI and PMI data also on tap

It will be another central-bank-heavy week with the RBA, SNB and BoE. Retail sales will be the highlight in the United States. Plenty of other data also on the way, including flash PMIs and UK CPI.

Read more

Forex MAJORS

Cryptocurrencies

Signatures