A boost in rates in September currently has a 27% likelihood, according to CME Group fed funds futures. The majority of investors are banking on a December rate hike. Chances of a move during the Fed's final meeting of the year sit at 46%.
Volatility that plagued Friday's session could continue to rock markets in coming days as investors try to guess the Fed's next move. Wall Street ended Friday with a massive selloff as worries peaked over the Fed and increased interest rates, including comments from two Fed members that appeared to show a conflicted central bank.
Boston Fed President Eric Rosengren on Friday was the latest member to back a rate hike sooner rather than later. Rosengren, a voting member of the Federal Open Market Committee, said that the risks to the U.S. economy have diminished and that there are concerns of "growing imbalances in some asset classes" if the Fed does not step in to normalize rates.
The S&P 500 fell 2.45% on Friday, its biggest daily decline since the Brexit decision in late June. The Dow Jones Industrial Average declined 2.13%, and the Nasdaq was lower by 2.54%. Benchmark indexes closed with their first move of more than 1% since July 8.
The back half of the week is filled with key economic data likely to influence the Fed's trigger finger when members meet on Sept. 20-21. Retail sales data, out Thursday, is among the most important of the releases, providing an insight into consumer behavior in August. Retail sales are expected to come in flat for August, while core sales, which excludes automobiles, likely climbed 0.4% over the month.