Everybody wants to know when the Fed will raise rates.

Rightly so. It will be the first rate hike in nine years (!), and the market could throw a fit.

People are going nuts trying to figure this out. There are linguists who dissect every syllable that comes out of Janet Yellen’s mouth, looking for clues.

I’ll show you an easy and more accurate way to glean the future.

There’s a market called the fed funds futures market. Traders use it to bet on what the fed funds rate will be in a given month.

In other words, fed funds futures traders bet their own money on when the Fed will hike rates.

This market correctly predicted that the Fed wouldn’t raise rates over the last several years. Let’s see what it’s telling us today.

Current fed funds futures prices imply the following probabilities of a rate hike:

There won’t be a rate hike at the April meeting. Probably not in June, July, or September either. October is a coin toss.

For now, the market thinks the long-awaited hiking will begin in December.

Now here’s where this gets really interesting. We can chart these probabilities over time to study how expectations have changed.

In September 2014, the fed funds futures market was convinced that the Fed would raise rates by September 2015.

Convinced!

Back then, fed funds futures prices indicated a 99% probability that the Fed would hike rates in September 2015.

Today, that probability is just 29%.

This has become a reliable pattern. The market tends to believe the Fed’s jawboning as long as the date in question is still a ways off.

But as the date draws near, the market gets skeptical. For good reason. The Fed talks a big game about raising rates. But every time the moment of truth approaches, it chickens out.

The Fed wants us to think it might raise rates at any time, to discourage speculation in US stocks and bonds. But it’s not actually going to raise rates anytime soon.

Glance up to the first chart again. See the “67%” that implies the Fed will finally hike in December? I bet that will decline to less than 50% by June, and less than 25% by October. The fed funds futures market will call malarkey on the Fed once again. And the first rate hike will be put off until 2016.

But the thing about 2016 is it’s an election year. Can’t risk upsetting the apple cart for Hillary.

So first rate hike in 2017, I guess.

Most of the financial media, by the way, are still predicting a June or September hike. That’s why you shouldn’t listen to them. Instead, listen to people with skin in the game, like the traders who comprise the fed funds futures market.

And ignore anyone who talks about investing but doesn’t actually, you know, invest.

Thanks for reading. I write a monthly investment article for The Casey Report. You can check it out here.