Fed 'on notice' that it may need June rate hike -CIO

STORY: U.S. consumer spending increased more than expected in April, boosting the economy's growth prospects for the second quarter, and inflation picked up, which could prompt the Federal Reserve to raise interest rates again next month.

Prior to the release of that data, Nicholson says that "if you looked at Fed funds futures, it was about a 62% chance that they were going to pause, and about a 38% chance that they would actually raise rates in June by 25 basis points."

But after the data was released, says Nicholson, those numbers "flip-flopped" to show a 65% chance of a rate hike in June and a 35% chance of a pause.