As the US presidential election was unfolding last night the odds of a rate hike in December fell to just 50% from around 80% according to fed fund Futures. Like the quick turnaround in stocks, fed fund futures have reversed as well and the probability of hike in December is back up to 82% (up slightly from 78% a week ago) according to Bloomberg WIRP. Fed fund futures are priced at 99.50 for December 2016 (take 100 minus fed fund futures to derive the implied fed funds rate) and 99.17 for December 2017. The December 2017 contract is at the lowest level since June 2016 (implying higher rates).
