After Friday’s huge jobs report, showing non-farm payroll growth vastly higher than expected and the first signs of wage growth in years, the market is increasingly confident that the Fed will raise rates at their December meeting.
Fed funds futures contracts are a financial instrument that lets market participants bet on where they expect the benchmark Fed funds rate will be at various times in the future. The price of those contracts can be used to estimate the market’s view of the likelihood of a rate hike by the end of this year.
Today, that implied probability has skyrocketed to around 70%, up nearly 20 percentage points since yesterday:
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.