Odds of a Rate Hike Rise, 10-Year Treasury on the MoveDecember 3, 2015
According to activity in the futures market, the probability of a Federal Funds rate hike by the end of the year has jumped from 30 percent in October to 75 percent today. And with her speech at the Economic Club of Washington yesterday, Federal Reserve Chair Janet Yellen continues to pave the way.
In terms of impact, while the rate for a conforming 30-year mortgage averaged 3.93 percent last week, down 2 basis points from the week before, the yield for 10-Year Treasury notes, off of which the mortgage market tends to moves, is currently trading up 16 basis points for the day.
Comments from Plugged-In Readers
I’m convinced that the Fed is going to pull the trigger and finally raise the rate at its December meeting.
UPDATE: According to an analysis of 30-Day Fed Fund futures prices by the CME Group, the probability of a Fed Rate hike this month is up to 79 percent.
This rate increase is like the Ronda Rousey of economic impact.
I’m quite sure they will raise it .25 at their upcoming meeting. Why? Mostly psychological. They’ve delayed it for so many different reasons, they need to put a stick in the sand and basically say, “yes we have a backbone.” Materially it won’t effect things much, once the childish market hysteria calms down. i.e. I don’t think the fed will bump it a further .25 at their meeting after December’s . They will wait and see what happens. Maybe bump it again in spring or summer 2016 if all in humming along.
But as for the December meeting, yup, it’s mister mojo rising.
The Fed needs to raise the rate so they can lower it again when the global recession hits. And after that, negative rates are in play.
I’m not happy about it but it’s still hella overdue.
Men have no problem separating themselves from boys.
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