March Fed rate hike is off the table - CME data

CME Group 30-Day Fed Fund futures prices show markets see only a 22 % probability of a rate hike in March.

Historically the rate hikes have happened only when the probability stood at least above 60%. This way there is no element of shock/surprise and financial market instability.

Fed’s Mester, while speaking to Bloomberg on Wednesday, did state the central bank does not want to do anything that would surprise markets.

Minutes of the February 1 meeting released overnight showed officials could raise short-term interest rates “fairly soon” in light of an improving economy and the possibility that the Trump administration’s proposed economic policies could push inflation up faster than anticipated.

Markets expect a rate hike in June

The June rate hike probability stands at 46%. There is consensus in the market that the next rate hike would happen in June followed by another move in December.