Fed: Close to 50% hike priced in for this summer – Deutsche Bank

Research Team at Deutsche Bank, suggests that in terms of Fed expectations we ended the week with a close to 50% hike priced in for this summer.

Key Quotes

“The odds of a July hike are sitting at 48% (up from 47% on Thursday) with June sitting at 28% (unchanged versus Thursday).

As you’ll see shortly it’s a busy week for Fedspeak this week and it’s set to be capped off by Fed Chair Yellen on Friday evening. There was actually a bit of chatter from the weekend to note with regards to the Fed. The usually dovish Rosengren (voter), in an interview with the FT, said that while he is sensitive to how the data comes in, also noted that he ‘would say that most of the conditions that were laid out in the minutes, as of right now, seem to be on the verge of being met’. Rosengren also added that the Fed had set a ‘relatively low threshold’ for improvement in growth and that the economy was ‘making progress on getting to inflation at 2%’.

Meanwhile fellow Fed official Williams (non -voter), who leans slightly hawkish, played down the US President Campaign as having an impact on the Fed’s decision for a possible change in policy.”