In a research note released this morning, Goldman Sachs chief economist Jan Hatzius wrote: Superforecasting Fed Policy

“… 35% probability for a hike in June, a 35% probability for July, a 20% probability for September—our previous modal forecast—and a 10% probability for either a later hike or a cut.”

This suggests a cumulative forecast probability of 70% by the July meeting, and 90% by September.

The Fed has definitely changed expectations.

For amusement … early in my career, as a scientist at SAIC in San Diego (my undergraduate degree is in chemistry), I was invited to a sales meeting to discuss potential new contracts.  A senior salesperson discussed one potential contract, and he was asked the probability of obtaining the contract.  He said it was 50%.

Asked how he came up with the odds, he said: “Either we get it or we don’t.”

The Fed is more data dependent than that salesperson.  A pickup in inflation and a decent jobs report will increase the odds of a June rate hike.  But I suspect that sales guy would put the odds at 50%: Either they hike or they don’t!