Chance of a March interest rate hike almost doubled: CME

Hawkish statements from several prominent Fed officials as well as increased optimism for economic growth are pointing to a strong possibility for a March interest rate hike.

Probability that the Federal Open Market Committee will approve an increase at its March 14-15 meeting zoomed to 69 percent Wednesday morning, about double what it was the day before, according to the CME. Other gauges cited by market watchers point to a greater than 80 percent chance.

Just last week, the market was pricing in less than 1 in 5 odds that the FOMC would move.

Stocks were pointing to a sharply higher open on Wall Street, while government bond yields surged as well. The benchmark 10-year note stood near 2.47 percent, its highest level in two weeks.

The expectations shift comes amid a flurry of Fed-speak. New York Fed President Bill Dudley, Philadelphia's Patrick Harker and Robert Kaplan of Dallas each made statements Tuesday indicating that a hike was looming.

Dudley's comments seemed to spark the biggest movement with his observation that the case for a hike has gotten "a lot more compelling."

On top of that, economic data released Wednesday morning showed that the economy is just shy of the Fed's 2 percent inflation target. The Personal Consumption Expenditures index — thought to be Chair Janet Yellen's preferred inflation gauge — rose 0.4 percent in January, boosting the annualized gain to 1.9 percent and near the Fed's target of 2 percent.

Meanwhile, economic growth appears to be accelerating a faster-than-expected pace.

The New York Fed's GDP tracker most recently pointed to fourth-quarter GDP growth of 3.1 percent, a sharp rise from the 1.9 percent indicated at the beginning of 2017. The Atlanta Fed's forecast is a bit less enthusiastic at 2.5 percent, but it also has been on the rise over the past few weeks.

The rise in rate expectations also comes amid a powerful showing for the stock market.

The Dow industrials gained more than 250 points at the market open Wednesday. The index was up 5.3 percent in 2017 heading into the day's action.