BOJ Policymakers Warn Weak Yen Could Fuel Inflation Risks and Delay Rate Action 
BOJ Rate Decision in Focus as Yen Weakness and Inflation Shape Market Outlook 
Fed Governor Lisa Cook Warns Inflation Risks Remain as Rates Stay Steady 
Jerome Powell Attends Supreme Court Hearing on Trump Effort to Fire Fed Governor, Calling It Historic 
Bank of England Expected to Hold Interest Rates at 3.75% as Inflation Remains Elevated 
Why Trump’s new pick for Fed chair hit gold and silver markets – for good reasons 
Bank of Canada Holds Interest Rate at 2.25% Amid Trade and Global Uncertainty 
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 14th May)
- 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 percent.
- August 2018 meeting: Market is attaching 91.2 percent probability that rates will be at 1.75-2.00 percent, and 8.8 percent probability that rates will be at 2.00-2.25 percent.
- September 2018 meeting: Market is attaching 16.8 percent probability that rates will be at 1.75-2.00 percent, 76 percent probability that rates will be at 2.00-2.25 percent, and 7.3 percent probability that rates will be at 2.25-2.50 percent.
- November 2018 meeting: Market is attaching 15.2 percent probability that rates will be at 1.75-2.00 percent, 70.6 percent probability that rates will be at 2.00-2.25 percent, 13.3 percent probability that rates will be at 2.25-2.50 percent, and 0.8 percent probability that rates will be at 2.50-2.75 percent.
- December 2018 meeting: Market is attaching 6.8 percent probability that rates will be at 1.75-2.00 percent, 40.1 percent probability that rates will be at 2.00-2.25 percent, 44.9 percent probability that rates will be at 2.25-2.50 percent, 7.7 percent probability that rates will be at 2.50-2.75 percent, and 0.4 percent probability that rates will be at 2.75-3.00 percent.
- January 2019 meeting: Market is attaching 6.1 percent probability that rates will be at 1.75-2.00 percent, 36.5 percent probability that rates will be at 2.00-2.25 percent, 44.4 percent probability that rates will be at 2.25-2.50 percent, 11.7 percent probability that rates will be at 2.50-2.75 percent, and 1.3 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 eased for near month and tightened for far months.
- Next hike is priced in June with 95 percent probability, instead of 100 percent a week ago.
- The market brought forwarded the third hike for 2018 in September and pricing it with 83.3 percent probability compared to 78.2 percent a week ago.
- The market is pricing the fourth hike in December with 53 percent probability instead of 47.4 percent probability just a week ago.
FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest
