by Calculated Risk on 1/30/2006 07:27:00 PM

Dr. Altig provides the Fed Funds probabilities for the next 3 meetings:

Jan 31st:
4.5%, 97%

March 28th:
4.75%, 73%
4.5%, 20%

May 10th:
4.75%, 53%
5%, 28%
4.5% 15%

So even with the dissapointing GDP data, it appears the market expects at least two more rate hikes. Dr. Duy channels the Fed with his always insightful Fed Watch: Now It Gets Interesting...

For the Fed watcher, the 4Q05 GDP report is a real brainteaser. The central focus of the many, many blogs covering Friday’s news was the disappointing growth numbers (see William Polley’s and James Hamilton’s views, the latter including a long list of similar concerns). To be sure, the weak headline number deserved attention. But I was surprised by the relatively little attention placed on the inflation reading. I doubt the Fed is going to let that number slip by so lightly. Weak growth and higher inflation? Now that’s interesting.

And on the topic of inflation, Fed Economist Mike Bryan writes: Holding on to the Edge of Comfort

Today’s PCE inflation report for December seems to have gotten a ho-hum response in financial markets. As it should. The data were tame and not widely off expectations.

Not everyone agrees with Dr. Bryan's take on inflation (see Barry Ritholtz' Myths of the Greenspan Era). As a caveat, Dr. Bryan is writing for himself and not the Fed. Still its interesting to read his views.