Taiwan Central Bank Expected to Hold Interest Rates Steady Through 2027 
ECB Eyes Rate Hike Amid Iran Conflict-Driven Energy Price Surge 
RBA Set to Hike Rates Again Amid Inflation Surge and Global Uncertainty 
Bank of Japan Governor Signals Gradual Progress Toward 2% Inflation Target 
BOJ Holds Interest Rates Steady Amid Middle East Uncertainty 
Goldman Sachs Raises ECB Rate Hike Forecast Amid Persistent Energy-Driven Inflation 
J.P. Morgan Now Expects Two ECB Rate Hikes Amid Inflation Pressures 
FOMC increased interest rates in March and June and increased its forecast from three rate hikes in 2018 to four rate hikes. June decision was unanimous. Current Federal funds rate - 175-200 bps (Note, all calculations are based on data as of 9th July)
- August 2018 meeting: Market is attaching 98.5 percent probability that rates will be at 1.75-2.00 percent, and 1.5 percent probability that rates will be at 2.00-2.25 percent.
- September 2018 meeting: Market is attaching 18.1 percent probability that rates will be at 1.75-2.00 percent, 80.7 percent probability that rates will be at 2.00-2.25 percent, and 1.2 percent probability that rates will be at 2.25-2.50 percent.
- November 2018 meeting: Market is attaching 17.2 percent probability that rates will be at 1.75-2.00 percent, 77.4 percent probability that rates will be at 2.00-2.25 percent, and 5.5 percent probability that rates will be at 2.25-2.50 percent.
- December 2018 meeting: Market is attaching 6.2 percent probability that rates will be at 1.75-2.00 percent, 40.2 percent probability that rates will be at 2.00-2.25 percent, 50.8 percent probability that rates will be at 2.25-2.50 percent, and 2.7 percent probability that rates will be at 2.50-2.75 percent.
- January 2019 meeting: Market is attaching 5.5 percent probability that rates will be at 1.75-2.00 percent, 36.6 percent probability that rates will be at 2.00-2.25 percent, 49.7 percent probability that rates will be at 2.25-2.50 percent, and 7.9 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 probabilities have tightened for both the near month and far month.
- The market is pricing the third hike for 2018 in September and pricing it with 80.7 percent probability compared to 75.3 percent a week ago.
- The market is pricing the fourth hike in December with 53.5 percent probability instead of 47.5 percent probability just a week ago.
- The market has started pricing the fourth rate hike with more than 50 percent probability.
