Market expectations for a Fed rate hike have declined sharply

Odaily News Traders now see roughly a coin flip chance that the Federal Reserve raises interest rates this month.

According to CME data, market pricing currently suggests a probability of about 50% for a 25-basis-point rate hike by the Fed. Just yesterday, investors had priced in a 70% chance of a hike. Earlier, several Fed governors delivered remarks aimed at tempering market assumptions that a rate increase was a done deal.

Fed Governor Waller just stated that if August data shows continued improvement in inflation, he would support holding rates steady. A day earlier, New York Fed President Williams also indicated that the case for a rate hike is not compelling enough at this point.