Market Expectations for Fed Rate Hike Significantly Drop, Probability of Hike This Month Falls to Around 50%

BlockBeats News, September 3rd. The likelihood of the Fed raising interest rates this month is now basically a coin toss. According to CME's "FedWatch" data, the current market pricing indicates that the probability of a 25 basis point rate hike by the Fed is around 50%, whereas just yesterday investors were pricing in a 70% probability of a rate hike.

Earlier, several Fed officials gave speeches trying to dispel the notion that a rate hike was a done deal. Fed Governor Waller stated tonight that if the August data shows continued improvement in inflation, he would support keeping the rates unchanged. A day earlier, New York Fed President Williams also mentioned that the current reasons to support a rate hike are not sufficient.