CME Group FedWatch shows virtually no chance of of a rate hike tomorrow

CME Group FedWatch tool, which calculates unconditional probabilities of Federal Open Market Committee (FOMC) meeting outcomes to generate a binary probability tree, shows the probability of a rate hike tomorrow at 4.8%.

The Fed usually assesses the impact of a recent monetary policy change before taking the next step and is unlikely to make two rate hikes in a row after raising the policy rate by 25 bps in April. Also, there won't be a press conference nor a Q&A session following the decision. However, there will be a press release, which will highlight the recent assessment of the economy and the reasoning behind the decision. Investors will look for clues that could point towards the timing of the next rate hike.

According to the CME Group FedWatch Tool, the next rate hike is likely to come in June, at which Chairwoman Yellen will be giving her statements and answering questions from the press. The probability of a 25 bps hike is shown at 67.4%.