Federal Reserve Faces Subpoena Delay Amid Investigation Into Chair Jerome Powell 
U.S. Prosecutors Investigate Fed Chair Jerome Powell Over Headquarters Renovation 
Bank of Japan Signals Cautious Path Toward Further Rate Hikes Amid Yen Weakness 
RBA Deputy Governor Says November Inflation Slowdown Helpful but Still Above Target 
Bank of England Expected to Hold Interest Rates at 3.75% as Inflation Remains Elevated 
FOMC increased interest rates in March and maintained its forecast for three rate hikes in 2018. FOMC also forecasted a faster pace of hikes next year than previously forecasted. March decision was unanimous. Current Federal funds rate - 150-175 bps (Note, all calculations are based on data as of 16th April)
- June 2018 meeting: Market is attaching 95 percent probability that rates will be at 1.75-2.00 percent, and 5 percent probability that rates will be at 2.00-2.25.
- August 2018 meeting: Market is attaching 89.3 percent probability that rates will be at 1.75-2.00 percent, and 10.7 percent probability that rates will be at 2.00-2.25 percent.
- September 2018 meeting: Market is attaching 25 percent probability that rates will be at 1.75-2.00 percent, 67.2 percent probability that rates will be at 2.00-2.25 percent, and 7.8 percent probability that rates will be at 2.25-2.50 percent.
- November 2018 meeting: Market is attaching 22.7 percent probability that rates will be at 1.75-2.00 percent, 63.4 percent probability that rates will be at 2.00-2.25 percent, 13 percent probability that rates will be at 2.25-2.50 percent, and 0.9 percent probability that rates will be at 2.50-2.75 percent.
- December 2018 meeting: Market is attaching 11.4 percent probability that rates will be at 1.75-2.00 percent, 43.1 percent probability that rates will be at 2.00-2.25 percent, 38.2 percent probability that rates will be at 2.25-2.50 percent, 6.9 percent probability that rates will be at 2.50-2.75 percent, and 0.5 percent probability that rates will be at 2.75-3.00 percent.
The probability is suggesting,
- Since our last review a week ago, the probability has tightened for near month and eased for far months.
- Next hike is priced in June with 95 percent probability, instead of 93.8 percent a week ago.
- The market brought forwarded the third hike for 2018 in September and pricing it with 70 percent probability compared to 76.9 percent a week ago.
- The market is pricing the fourth hike in December with 45.6 percent probability instead of 48 percent probability just a week ago.
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