Today we saw another stock market decline and yet another shift further away from rate hikes this year.

I put this table together from CME FedWatch data.

The above table is a bit simplified because there is a chance of hikes higher than a quarter point. However, I believe it is safe to discount multiple hikes until we at least see the first one.

December 16, 2015 Probability

January 27, 2016 Probability

As noted in the table at the top, one has to go all the way to March 16, 2016 before the Fed Fund Futures imply a quarter point hike.

Also, and as I have pointed out before, when the Fed does move, there is no good reason to assume the first hike will be to the range 0.25% to 0.50% from the current 0.00% to 0.25%.

Even if the Fed sticks with quarter-point ranges, the first hike (assuming there is one), may very well be to 0.125% to 0.375.

That range would give the Fed a quarter point to play with and it would change the implied "no-hike" odds. The key point now however, is the increasing chance there is no hike at all.

Mike "Mish" Shedlock