Poof! There go the odds of a rate cut in June

Just like that, with a single data report (monthly employment), the odds of a Fed rate hike at the June FOMC meeting went from likely (66%) to unlikely (32%), according to my own reading of the prices of Fed funds futures contracts.

As I keep saying, these bets on Fed policy can turn on a dime and are not reliable more than 45 days out.

The odds of a rate cut at the March 20 FOMC meeting are now a mere 2%. This meeting is close enough that the Fed funds futures are a fairly reliable indicator of what the Fed is likely to do.

The odds of a rate cut at the May 9 FOMC meeting are now a mere 6%, down from 22%. This meeting is far enough out that the Fed funds futures are still not a reliable indicator of what the Fed is likely to do.

The odds of a second rate cut at the August FOMC meeting went to zero, and the odds of a first rate cut fell from 100% to 66% (still likely). That does still tell us where market sentiment is, but August is too far away for the odds to be reliable.

-- Jack Krupansky