20 minutes prior to the release of the Fed Minutes, and markets are predicting with 80% certainty that the Federal Funds Rate will remain unchanged after the September 20 FOMC meeting.

Interpreting the chart above provided by the Federal Reserve Bank of Cleveland, we can see what markets expect:

• 2% probability that the Fed Funds Rate decreases to 5.00%
• 80% probability that the Fed Funds Rate remains unchanged at 5.25%
• 18% probability that the Fed Funds Rate increases to 5.50%
• 0% probability that the Fed Funds Rate increases to 5.75%

The statistics are the result of a formula exacted upon the Fed Futures Markets, in case you care.  If you don't care, that's fine.  It's pretty arcane, but you can read about it if you want to.

I expect the chart to shift in the days leading up to the September 20 FOMC meeting as markets leave their comfort zone about inflation and the Fed's take on it.

Dan Green is an active loan officer. Email or call 513-443-2020. Dan is on Twitter at @mortgagereports.