78% chance of Fed hike at Dec meeting - CME Group's FedWatch

Following comments from both Yellen and Fed's Bostic, Federal Funds Futures imply traders see a 78% chance of a Fed hike at Dec meeting according to CME Group's FedWatch

Yellen's comments:

• Gradual approach to hikes particularly appropriate in light of subdued inflation, low neutral rate
• Imprudent to leave rates on hold until inflation reaches 2%
• Can still achieve 2% target goal even if fed is underestimating slack or overestimating inflation expectations
• Low inflation likely due to transitory factors, sees many uncertainties
• Downward pressure on inflation could prove unexpectedly persistent
• Considerable' odds that inflation won't stabilize at 2% over next few years
• Risk that inflation expectations are not as well-anchored as they appear
• Data suggests labour mkt is healthy, without substantial slack & not overheated
• Evidence on labour mkt not definitive, says Fed must be 'open-minded'

Bostic's:

• Even after hurricanes, above 2% GDP expectation is reasonable
• Pace of job creation in the US remains strong
• Not overly concerned about asset price bubbles
• Want "clear evidence" inflation is rising to Fed's 2 percent target
• Attributes recent low inflation to remaining weakness in labor market, sign recovery is continuing
• Weak wages also a sign that slack remains in the labor market
• Do not regard monetary policy as "too loose" for current economic conditions or that it is feeding asset bubbles