Following an unexpectedly weak ISM report, weak auto reports, and a weak jobs report on Friday, rate hike odds shifted from a decent possibility of two hikes by December to a roughly 50-50 chance of one hike in December.
- The Fed won’t hike
- The Fed will yap about hiking
- Economists will shift their expectations of a hike to November
September 21 Meeting Odds
December 14 Meeting Odds
August 26 Flashback
On August 26, Fed Chair Janet Yellen gave a speech telling the market to prepare for hikes. Here is the before and after speech results.
After her speech rate hike odds for December jumped to 60.9%. The odds of two hikes jumped to 14.8%.
The market has since had other thoughts. Odds of least one hike are close to 50-50. Odds of two or more hikes is 9.5%.
Odds of multiple hikes will vanish on the next poor economics report of September 21, whichever comes first.
- ISM Dips Into Negative Territory; It’s “An Anomaly, Just a Pause”
- Ford Announces “Sales Plateau” After 8% Decline, Missing Estimates; Diving Further Into the ISM “Anomaly”
- Productivity Dives 0.6% as Unit Labor Costs Soar 4.3%; Robust Hiring About To End
- Jobs +151K, Private +126K, Employment +97K, September Hike Off the Table
Mike “Mish” Shedlock