The fed funds futures has somewhat shifted its rate hike odds in response to the big upside surprise to Nov payrolls. By the June meeting there is now a 66% chance of a 25 bps rate hike up from 34% yesterday. There is now a 100% chance of a 25 bps hike by the Aug meeting priced in up from 86% yesterday and there is also a 20% chance the Fed raises by 50 bps by Aug. Looking at the Sept contract, there is a 72% chance of a total of 50 bps in hikes up from 34% yesterday.
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