Summer rate hike odds pop after Yellen comments

The CME Group FedWatch probability for a June rate hike spiked on the back of Federal Reserve Chair Janet Yellen said that a rate hike is "probably" appropriate in the near term, given an improvement in economic data.

"It's appropriate, and I've said this in the past, I think for the Fed to gradually and cautiously increase our overnight interest rate over time and probably in the coming months, such a move would be appropriate," she said at an event at Harvard University.

Before the announcement, the market estimated a 28 percent chance of a June rate hike, but those odds spiked to 34 percent before settling back down to 30 percent.

Traders tracked by the CME now see a 60 percent chance of a July rate hike. Those odds briefly jumped to 62 percent, just after the Fed chair spoke; they sat at a 57 percent chance before her speech.

Thirty-day fed funds futures prices are widely considered a reliable indicator of U.S. monetary policy changes. CME's FedWatch tool tracks the target rates based on fed funds futures contract prices.

A reading above 50 percent indicates the market's guess for the next rate hike.

— CNBC's Jacob Pramuk contributed to this report.

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