Yesterday, my revised outlook for Fed rate hikes in 2015 put liftoff in October with a 50% chance, and no further hikes until at least March of 2016. Today, that gets updated to a higher 58% chance of liftoff in October (a hike from the current 0.0% to 0.25% range to 0.50%), and a 56% chance of a second hike to 0.75% in January.
My forecast is based on the fed funds futures probabilities provided by the CMW Group FedWatch web page:
These numbers are based on fed funds futures contract prices, so they are what actual market participants are betting, not the mere whim of some economist or pundit - or even the Federal Reserve itself.
Once again, I didn't expect the outlook to change as quickly as it has these past two days, but... it has. I always defer to reality.
Incidentally, the odds for liftoff in September are now only 39%, and 12% in June, compared to 32% and 8% yesterday.
-- Jack Krupansky