Fedwatch Tool indicates shift in mood over span of 7 days

While the numbers are small, this is a significant swing in mood.

Two screen captures below taken from CME Fedwatch Tool – the top taken on 07 January 2019 and the bottom taken today.

  1. Odds of a rate cut in H1 has totally disappeared.
  2. Odds for one rate hike increased across the board.
  3. Previously none, there are now positive odds for a second hike as early as June.

When there are seesaws like this in expectation, there will be plenty of volatility in USD and stocks

Significant shift from dovish to hawkish

Significant shift from dovish to hawkish

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