Following today’s retail sales report, the GDPNow Forecast for fourth quarter GDP rose from 3.1% to 3.3%.

In related news, Curve Watcher’s Anonymous notes a 90.6% probability of a rate hike in December.

Latest Forecast: 3.3 percent — November 15, 2016

gdpnow-2016-11-15

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2016 is 3.3 percent on November 15, up from 3.1 percent on November 9. The forecast of fourth-quarter real personal consumption expenditures growth increased from 2.6 percent to 2.9 percent after this morning’s retail sales report from the U.S. Census Bureau.

December Rate Hike Odds

fedwatch-2016-11-15

Next Hike Expected June 2017

fedwatch-2016-11-15a

Above charts from CME Fedwatch, annotations by Mish.

The market thinks a hike is coming in December and so do I, finally. There’s plenty of time for the Market’s June 2017 opinion to change.

The market delivered this message toady: “I am the market and I approve this message“.

Mike “Mish” Shedlock