September Fed rate hike probability falls after non-farm payrolls

Fed more likely to stay on the sidelines.

Fed fund futures now price about a 20% chance of a rate hike at the September 17 FOMC meeting, compared to about 26% yesterday.

The low probability of a hike is at odd with what FOMC officials have been saying but so has the economic data. In order to hike, the Fed will need a high level of confidence that the economy will grow around 2.5%.

WSJ Fedwatcher Jon Hilsenrath says September is still the most-likely liftoff date. ". Because they want that confirmation, a June rate increase still looks unlikely and September the most-probable liftoff date," he wrote after the jobs report.

Despite the move in rates, the US dollar is only modestly lower after the jobs report.