CME FedWatch Tool Shows March Rate Hike Odds Higher

Hawkish statements from several prominent Fed officials as well as increased optimism for economic growth are pointing to a strong possibility for a March interest rate hike.

Probability that the Federal Open Market Committee will approve an increase at its March 14-15 meeting zoomed to 69 percent Wednesday morning, about double what it was the day before, according to the CME. Other gauges cited by market watchers point to a greater than 80 percent chance.

Just last week, the market was pricing in less than 1 in 5 odds that the FOMC would move.

Stocks were pointing to a sharply higher open on Wall Street, while government bond yields surged as well. The benchmark 10-year note stood near 2.47 percent, its highest level in two weeks.

The expectations shift comes amid a flurry of Fed-speak. New York Fed President Bill Dudley, Philadelphia’s Patrick Harker and Robert Kaplan of Dallas each made statements Tuesday indicating that a hike was looming.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza