This will make it spicy for the shorters.Markets are pricing in...

This will make it spicy for the shorters.

Markets are pricing in a 45% chance of no Fed rate hike on March 22 and a 55% probability that policy makers will raise rates by another 25 basis points to between 4.75% and 5%, according to the CME FedWatch tool. The chances of a 50 basis point hike are now seen at zero after rising to more than 70% early last week.

The central bank is mostly expected to lower its fed-funds rate target to 4.25% to 4.5% by July, which implies at least one rate cut will take place by then, according to 30-day Fed Funds futures.

Fed funds futures slid, with expectations of the Fed's terminal rate sliding to 3.84% in December from above 5% last week.

Goldman Sachs (NYSE:GS), among other big banks, said it no longer expected the Fed to deliver a rate hike at the end of its two-day policy meeting on March 22.

Barclays (LON:BARC) said that the latest bout of financial market jitters introduced significant uncertainty into the market and that policymakers will pause at next week's meeting.

US CPI tonight forecast to drop 0.4% from 6.4% to 6% YOY. US bond yields have rolled over.