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CME Fedwatch data, annotations and highlights by Mish

Economists surveyed by Bloomberg Econoday forecast nonfarm payrolls would rise by 187,000 with private payrolls up 179,000.

Yesterday, ADP said private payrolls rose by only 89,000. Today, the BLS said nonfarm payrolls rose by 336,000.

The upside surprise sent bond yields and rate hike odds up across the board. I selected May of 2024 for detailed analysis of CME Fedwatch data.

May 1, 2024 FOMC Rate Hike Odds

• The odds of at least one rate cut by the May 2024 meeting fell by 13.3 percentage points.
• The odds of at least one rate hike rose by 9.0 percentage points.
• The single most likely thing is no change, up 4.4 percentage points to 44.9 percent.

What about this year?

December 13, 2023 FOMC Rate Hike Odds

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Looking ahead to the December 13, 2023 meeting, market participants think the single most likely thing is for the Fed to hold pat.

For December, the odds of at least one hike rose from 33.1 percent to 42.6 percent, an overall increase of 9.5 percentage points.

Curiously, that’s nearly the same increase as the 9.0 percentage point jump for May of 2024.

Across all time frames, the odds of hikes increased, yet never jumped above 50 percent.

Higher For Still Longer But No Hikes

The market perception is higher for longer but still no more hikes.

This will change quickly if the Fed starts yapping about the need for more hikes.

Jobs Unexpectedly Surge by 336,000 But Employment Only Rises by 86,000

For discussion of the jobs report that impacted the above odd, please see Jobs Unexpectedly Surge by 336,000 But Employment Only Rises by 86,000

Also see Government Jobs Rose by Nearly 1 Million Unadjusted in Sept, What Going On?

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