Below we show the odds of a Fed rate hike for the next year of Fed meetings, using data from the Fed Funds futures market yesterday. We calculate each probability independently. In other words, the January meeting odds are calculated to show odds of a hike at that meeting regardless of whether there is a hike at the December meeting. We also assume that each hike rises the target band for Fed Funds by 25 bps, and that the new Fed Funds effective settles exactly 25 bps higher than the month before. That assumption may be aggressive, as it’s not clear that the Fed will be able to keep Fed Effective in the middle of the new target band after its first hike. In any event, the catalyst for the recent jump in odds of a hike has come thanks to both last week’s Fed statement, which was much more hawkish in its assessment of the economic situation and the possibility of a hike at the December meeting. Further comments from a number of FOMC members this week have reiterated the same message as that statement pushing up front end yields as they price the likelihood of a hike to close the year.