Fed Rate Hike Predictions

Here are the latest predictions of what the Fed using the latest crystal ball reading technology from Carlson-Craig-Merck. These charts are from macroblog.

After the FOMC meeting last Wednesday and the retail sales and trade deficit numbers last Thursday, the chart shows almost a 60% chance that the Fed will pause and keep the interest rate at 5%. There’s almost 40% chance that the Fed will raise rates to 5.25%.

All this reminds me of checking the weather forecast. If there’s a 60% of rain and a 40% of sunshine, what does it really tell you? Nothing really, except for the fact that it could rain or not. The market doesn’t have a clue on what the Fed is going to do at this point.

August is even murkier…