Markets are almost certain the Fed is hiking interest rates in December

Investors are pretty confident an interest rate hike is coming from the Federal Reserve next month.

Bloomberg's World Interest Rate Probability (WIRP) function, a market-based tracker of the likelihood of different interest rate corridors, now shows investors are pricing in a 96% chance the Fed raises its key interest rate 25 basis points to a range of 0.50% to 0.75% at its upcoming meeting on December 13 and 14.

There has been a massive jump towards a rate hike since the start of the month. The market had only priced in a 58% chance as of November 1 in the midst of a slump for financial markets.

Additionally with the election uncertainty removed, the stock market rising, and yields in the bond market already heading higher, the probability has increased 16% since the day before Donald Trump was elected president - from 80% to its current 96% level.

Bond investor Jeff Gundlach, head of DoubleLine Funds, said before the rate hike in December 2015 that WIRP should be above 70% to make the Fed comfortable enough to hike. While this may not be completely accurate, it reflects the consensus that the Fed wants the market to have the move priced in before they boost rates.

Additionally, even before the post-election market strength, it appeared the Fed was telegraphing a December hike given it's language regarding inflationary pressures following the November meeting.

This near-certainty is a stunning reversal from just over four months ago, as the probability of a December rate hike bottomed out at 7.8% on July 5 after the Brexit-related market sell-off.

One caveat here, nothing is certain and there is a 4% chance priced in that the Fed will hold. As it looks now, however, Janet Yellen will be talking about a rate rise just 28 days from now.