Investing.com - Market expectations for additional Fed rate hikes this year faded in recent days, as last week’s disappointing April jobs report prompted traders to push back expectations for the next U.S. rate increase to early 2017.
The CME Group's (NASDAQ:CME) Fed Watch tool suggested traders saw about a 7% chance the Fed would increase interest rates at its June 14-15 meeting compared to 10% before the publication of the nonfarm payrolls and 20% a month ago.
The federal fund futures pointed to December as the market’s best guess for the next move in policy tightening with a probability of 40%. The odds rise to around 55% for the Fed’s February 2017 policy meeting.
Despite the low probability of a move this year, a number of Fed officials attempted to convince the market recently that the door was still open to the possibility of at least two more rate hikes in 2016.
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