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Traders push chances for Fed rate hike out to April

At this rate, 2016 as well as 2015 may be out of the picture for an interest rate hike.

Faced with deteriorating economic data and a growing chasm among Federal Reserve officials, traders now aren't pricing in the first rate hike until April 2016, according to Chicago Mercantile Exchange data.

Until the latest round of disappointing economic news Wednesday, traders had been holding out hopes for a March move.

However, signs of a slowdown are increasing.

The Federal Reserve building in Washington, D.C.
Bria Cousins | CNBC
The Federal Reserve building in Washington, D.C.

Retail sales missed economists' expectations in September while the August numbers were revised to flat. The producer price index declined by 0.5 percent, again far more than expected, as the market awaits Thursday's consumer price index release. The August CPI showed three-fourths of the country in outright deflation.

April is no lock, either, for an increase. Traders are pricing in just a 51 percent chance of a move then, with June considered a better bet at 62 percent. March's chances fell to 47 percent, while 2015 has been all but ruled out on the futures market, with October holding just a 5 percent chance and December at 27 percent.

Read More The US is closer to deflation than you think

While Chair Janet Yellen and other doves on the Federal Open Market Committee have made statements recently expressing confidence in a 2015 hike, divisions are growing. Fed governors Lael Brainard and. Daniel Tarullo both said this week the FOMC should wait until 2016.

The Fed's most recent read on the economy, called the Beige Book, was released Wednesday and said growth generally was only "moderate" across its 12 districts.