Halister News

(Bloomberg) -- The Fed is likely to raise rates even when the market-implied probability is as low as 40% in Bloomberg’s WIRP function, says DoubleLine CIO Jeffrey Gundlach.

• A hike this month is unlikely if the number is under 40%, Gundlach said in a webcast Thursday post-mkt NY time
• WIRP, which calculates probability in fed fund futures, stood at 28% yday; that’s down from 42% on Aug. 26 following dismal data on U.S. jobs, manufacturing and services
• Gundlach says the Fed is determined to show independence from data
  • NOTE: WIRP was 78% on eve of Fed’s rate hike on Dec. 16, 2015
• In the past week, Fed presidents including Lacker, Mester and Williams have offered upbeat assessments of the economy
  • Even so, WIRP pricing for chance of Sept. hike fell to 28% from 34% end of last week
• Fed Governor Brainard, a permanent voter, was added overnight to a list of speakers on Monday; see calendar
• Barclays says if Chair Yellen wants to raise market pricing for a hike, this is one of the last chances before the FOMC’s blackout period, according to a note