CME Group FedWatch's September hike probability fell to 13% after FOMC statement

CME Group FedWatch tool, which calculates unconditional probabilities of Federal Open Market Committee (FOMC) meeting outcomes to generate a binary probability tree, shows that the probability of a rate hike in September dropped to 13% from 28.2% in the previous day following FOMC's decision to raise interest rates by 25 basis points today. 

In its statement, the FOMC said that it still sees one more rate hike in 2017 and the longer-run path is unchanged. However, the Committee reiterated that the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data. The Committee further pointed out that it expects the inflation to remain around 1.6% in near-term, below its target rate of 2%. Minneapolis Fed's President Kashkari, a known dove, was the only person who voted to maintain the benchmark rate unchanged.

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