Here's Why The Next Fed Rate Hike Won't Happen Until 2018

The majority of investors, traders and analysts are convinced that a Fed rate hike is coming. Where they all disagree is the timing.

According to Bloomberg, traders are not pricing in a Fed rate hike through the end of 2017, are assigning a more than 50 percent chance of a rate hike in the beginning of 2018 and aren't pricing in a full rate hike until the end of the year.

Bloomberg noted that options on EuroDollar futures imply just a 25 percent chance of a rate cut by September, marking a sharp decrease from just two months ago when the prices indicated a rate hike was a "virtual certainty."

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Aaron Kohli, a fixed-income strategist at BMO Capital Markets shared a somewhat similar sentiment with Bloomberg. He said that the market "doesn't even begin to price in any real chance" of a rate hike until mid-2017 at the earliest.

Naturally, nothing is set in stone, and Fed policy makers make use of many variables informing a decision.

"You are not going to get any activity out of the Fed right now," James Camp, director of fixed-income at Eagle Asset Management also told Bloomberg. "They do not want financial conditions to tighten any further and they certainly don't want to continue this dollar stampede."