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September 4, 2016 | Eyes Shift to November and December

Mike 'Mish' Shedlock

Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.

Following an unexpectedly weak ISM report, weak auto reports, and a weak jobs report on Friday, rate hike odds shifted from a decent possibility of two hikes by December to a roughly 50-50 chance of one hike in December.

September Cake

  1. The Fed won’t hike
  2. The Fed will yap about hiking
  3. Economists will shift their expectations of a hike to November

September 21 Meeting Odds

Fedwatch 2016-09.02

December 14 Meeting Odds

Fedwatch 2016-09.02A

August 26 Flashback

On August 26, Fed Chair Janet Yellen gave a speech telling the market to prepare for hikes.  Here is the before and after speech results.

Fedwatch 2016-08-26A

After her speech rate hike odds for December jumped to 60.9%. The odds of two hikes jumped to 14.8%.

The market has since had other thoughts. Odds of least one hike are close to 50-50. Odds of two or more hikes is 9.5%.

Odds of multiple hikes will vanish on the next poor economics report of September 21, whichever comes first.

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Mike “Mish” Shedlock

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September 4th, 2016

Posted In: Mish Talk

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