As March Odds Top 80%, One Bank Says Not So Fast

“That Wells Fargo note is looking pretty prescient right now” – said no one, anywhere ever.

Until now.

Recall this from Wells out February 3:

Shortly after the bank wrote those words, everyone was talking about how the disappointing average hourly earnings print that accompanied the January jobs report effectively took a March hike off the table.

Oh what a difference a few weeks makes.

Following Tuesday’s super hawkish Dudley/Williams one-two punch, March odds are now above 80%:

(Bloomberg)

So trade accordingly, but do note that not everyone is buying it…

Via BofAML

The market has moved dramatically in the past two days to price in a hike at the March meeting. This was partly triggered by hawkish commentary from regional Fed presidents, including NY Fed President Dudley yesterday. While we agree that the chances of a hike in March have increased given the Fed commentary, we are sticking with our baseline forecast for the Fed to stay on hold at the next meeting and hike in June. That said, it is a very close call and subject to change depending on comments from Fed Chair Yellen and Vice Chair Fischer on Friday.