Posted by financialanalyst18 > 2015-08-24 11:11 | Report Abuse

September Fed-hike bets dropping like a stone Published: Aug 21, 2015 12:01 p.m. ET Odds of December 2015 move is now 60% By GregRobb Senior economics reporter Market expectations for a September rate hike are dropping like a stone. Traders now see roughly a 35% chance of a September rate hike, said Thomas Simons, an economist at Jefferies, down from more than a 50% chance just a few weeks ago. Investors now see a 60% chance of a rate hike in December, according to CME FedWatch. Fed fund futures, shown here, move higher as rate-expectations move lower. Some economists, including those at Credit Suisse, who had expected a September move are now switching to the December camp. “In our view, the risk that a near term tightening could exacerbate global concerns outweigh the benefits of tightening as soon as mid-September,” said Dana Saporta, an economist at Credit Suisse. “For us it is a difficult call. The domestic economy warrants tighter policy but the timing doesn’t seem right to initiate lift-off,” she added. Saporta said she wouldn’t rule out a rate hike at the Fed meeting in October, but the official call is now December. Her views on the Fed could change if financial markets calm down, she noted. Stocks have sold off around the world, particularly this week, as China’s recent devaluation of its currency have led many to question the health of the global economy. The Dow industrials DJIA, -3.12% have fallen to levels not seen since October.