Bank of Canada Holds Interest Rate at 2.25% Amid Trade and Global Uncertainty 
Jerome Powell Attends Supreme Court Hearing on Trump Effort to Fire Fed Governor, Calling It Historic 
RBA Raises Interest Rates by 25 Basis Points as Inflation Pressures Persist 
RBI Holds Repo Rate at 5.25% as India’s Growth Outlook Strengthens After U.S. Trade Deal 
China Extends Gold Buying Streak as Reserves Surge Despite Volatile Prices 
Bank of Japan Signals Readiness for Near-Term Rate Hike as Inflation Nears Target 
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 11th June)
- June 2018 meeting: Market is attaching 8.7 percent probability that rates will be at 1.50-1.75 percent, and 91.3 percent probability that rates will be at 1.75-2.00 percent.
- August 2018 meeting: Market is attaching 8.6 percent probability that rates will be at 1.50-1.75 percent, 89.6 percent probability that rates will be at 1.75-2.00 percent, and 1.8 percent probability that rates will be at 2.00-2.25 percent.
- September 2018 meeting: Market is attaching 2.3 percent probability that rates will be at 1.50-1.75 percent, 30.3 percent probability that rates will be at 1.75-2.00 percent, 66.1 percent probability that rates will be at 2.00-2.25 percent, and 1.3 percent probability that rates will be at 2.25-2.50 percent.
- November 2018 meeting: Market is attaching 2.1 percent probability that rates will be at 1.50-1.75 percent, 27.5 percent probability that rates will be at 1.75-2.00 percent, 64.7 percent probability that rates will be at 2.00-2.25 percent, 5.6 percent probability that rates will be at 2.25-2.50 percent, and 0.1 percent probability that rates will be at 2.50-2.75 percent.
- December 2018 meeting: Market is attaching 0.9 percent probability that rates will be at 1.50-1.75 percent, 13.5 percent probability that rates will be at 1.75-2.00 percent, 44.2 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, and 3.2 percent probability that rates will be at 2.50-2.75 percent.
- January 2019 meeting: Market is attaching 0.8 percent probability that rates will be at 1.50-1.75 percent, 12.4 percent probability that rates will be at 1.75-2.00 percent, 41.6 percent probability that rates will be at 2.00-2.25 percent, 38.7 percent probability that rates will be at 2.25-2.50 percent, and 6.1 percent probability that rates will be at 2.50-2.75 percent, and 0.3 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 not changed much.
- Next hike is priced in June with 91.3 percent probability, same as a week ago.
- The market brought forwarded the third hike for 2018 in September and pricing it with 67.4 percent probability compared to 68.5 percent a week ago.
- The market is pricing the fourth hike in December with 41.4 percent probability instead of 36.4 percent probability just a week ago.
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