What are the chances the Fed hikes this year
There are two FOMC meetings before the turn of the calendar. The first is Nov 2 and the market is pricing just a 19.3% chance of a hike then, despite some hawkish comments in the FOMC Minutes.
The main reasons that a hike is so unlikely are that it's a meeting that doesn't include a press conference and that it's just 6 days before the election. Fed members often talk about political independence but in practice it's hard to believe they will do something that could roil markets ahead of the vote.
December is where it gets interesting. All signs in the Minutes suggested a majority of voters plan to move before year-end so long as there isn't market turmoil or a problem in the economy.
The odds of a hike according to Fed fund futures are 66.7%. That edges higher to 69.4% in Feb and 76.7% in March. It steadily rises through 2017 but at no point is a hike fully priced in. If anything, that underscores the skepticism in markets.
