The implied probability of the Fed reaching 1% by the end of 2017 is 26% - Goldman Sachs

Goldman Sachs, in its latest report, takes note of the fact that the market is pricing in a slightly lower chance of a December hike from last week. The current implied probability of a December move (74%) is the lowest in the past two years.

The investment banker says, “the Forward curve – the OIS curve is currently pricing in 18bps of hikes for the rest of 2016, and another 16bps for 2017. 1% by EOY 2017 – the market implied probability of the Fed reaching 1% by the end of 2017 is 26%, 5% lower week over week. This is equivalent to 3 more hikes.”