Those who prefer trading signals to economic history can look to the CME Group’s FedWatch which offers a probability distribution for the funds rate based on the Fed Funds futures market. As of Friday afternoon, the odds for the funds rate on September 17th were 77% for 25 bp and 23% for 50 bp.  Looking ahead to the December FOMC meeting, the odds for 25 bp are 41%, 43% for 50 bp and 16% for 75 or 100 bp.

Taking everything together, a rate hike is coming but no one knows when.

This article was written by David Blizter, Chairman of the Index Committee, S&P Dow Jones Indices.

© S&P Dow Jones Indices LLC 2015. Indexology® is a trademark of S&P Dow Jones Indices LLC (SPDJI). S&P® is a trademark of Standard & Poor’s Financial Services LLC and Dow Jones® is a trademark of Dow Jones Trademark Holdings LLC, and those marks have been licensed to SPDJI. This material is reproduced with the prior written consent of SPDJI. For more information on SPDJI, visit http://www.spdji.com.

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