Market Has Yet to Fully Price a July Rate Hike

With full knowledge that the above chart is an accurate description of Fed policy making, the Fed has also painted itself into a data driven corner.

On Tuesday of this week, we learned new homes sales spiked above 600,000 in April. New-home sales exploded in April: What it means for buyers, sellers

Today, it was reported pending home sales jumped too. Pending home sales up 5.1 pct, highest level in a decade

The Atlanta Fed's GDP Now model raised its Q2 GDP growth estimate to 2.9 percent. It is a volatile figure, but the estimate has been mainly moving higher, up from 1.7 percent a few weeks ago.

The Fed has only hiked one time when the futures were below 70 percent odds, back in 1994: The great bond massacre (Fortune, 1994)

June odds are at 30 percent today. July odds are at 57 percent.

Assuming the housing data isn't an anomaly, economic data stays on the current trajectory and markets don't tumble, the Fed is going to be penned in by its "data drive" rhetoric. The markets, based on those futures odds, are still not fully pricing in a rate hike.

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