Interesting Rate Hike Odds: March favors Hikes, December Favors Cuts

Mish

Fed fund futures show a hike in March is more likely than a cut. In December, the opposite is true.

According to Fed Fund Futures on CME FedWatch, the odds of of a Fed interest rate hike in March outweigh those of of a hike in December of 2019.

In March, allegedly there is a 5.6% chance of a hike. By December, it looks like this.

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Which Way?

I suggest "The Under", rate cuts.

Mike "Mish" Shedock

Comments (12)
No. 1-10
Mike Mish Shedlock
Mike Mish Shedlock

Editor

No comments on new Layout?

killben
killben

Layout - Thumbs up from me! I found it easy to follow posts as it is in one sequence.

killben
killben

If markets do not misbehave too much (as in decline 20-30%) over the next 3 months it is likely March hike will happen. Powell seems to be playing his cards well. Create a flutter (like auto-pilot), soothe nerves, get a hike in, soothe nerves (data dependent), throw some more crumbs to soothe markets if it gets nervous, clear skies, get a hike in, rinse repeat! I do not know what happens when the hike and roll-off starts really biting as in markets swooning.

mrutkaus
mrutkaus

I like the new layout, more "intuitive" -- I was startled by just took a few seconds to realize it was a new layout and the vertical sequence. Sort of a top down approach.

shamrock
shamrock

Layout changes - good.

Casual_Observer
Casual_Observer

The rate matters less than the 20B per month the Fed is withdrawing from assets. Powell is a hawk until proven otherwise.

indc
indc

new layout is good.

Casual_Observer
Casual_Observer

I wouldn't bet on the Fed stopping anything or cutting rates again anytime soon. Reality needs to be reintroduced instead of bubble-economics that the Fed has been running since the days of Greenspan. Powell has no qualms and won't succumb to pressure.

2banana
2banana

So my best guess.

One more rate hike. And behind closed doors DJT wants it.

Why? Trump was the only one to talk about the big fat fake bubble of obama's fake economy.

He knew it was going to implode one way or another.

This way the Fed gets the blame and Trump may even get a rate cut or two right before the 2020 election. Now that there is some wiggle room above ZIRP.

Also - the great QE unwind continues...

everything
everything

Rate hikes are over, I believe CA is already pricing in a 2020 recession, being 5th world largest economy I'm sure they have a good handle on tax receipts and can see it coming quite a ways down the road. They (fed) want a soft landing. I'm already tightening my belt here. All previous rate hikers have been followed by recession, it's just going to take some time, this economy is to big. AND, still, with rates this low, any recession we might get will be more like a speed bump, and our recessions are more like debt flushes & golden parachutes. Money is easy, (for some) and debt no longer matters, (as long as can be serviced), although so many more of us are really just getting by these days anyway. That's got to tell you something in and of itself.


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