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Fed Hike aftermath Series: Hike probabilities over coming meetings

FOMC followed through its promise and hiked rates four times in 2018 and forecasted two more rate hikes for 2019. Current Federal funds rate - 225-250 bps (Note, all calculations are based on data as of 7th January)

  • January 2019 meeting: Market is attaching 99.5 percent probability that rates will be at 2.25-2.50 percent, and 0.5 percent probability that rates will be at 2.50-2.75 percent.
     
  • March 2019 meeting: Market is attaching 99.5 percent probability that rates will be at 2.25-2.50 percent, and 0.5 percent probability that rates will be at 2.50-2.75 percent.
     
  • May 2019 meeting: Market is attaching 93.5 percent probability that rates will be at 2.25-2.50 percent, and 6.5 percent probability that rates will be at 2.50-2.75 percent.
     
  • June 2019 meeting: Market is attaching 87.3 percent probability that rates will be at 2.25-2.50 percent, and 12.8 percent probability that rates will be at 2.50-2.75 percent.
     
  • July 2019 meeting: Market is attaching 0.9 percent probability that rates will be at 2.00-2.25 percent, 86.5 percent probability that rates will be at 2.25-2.50 percent, and 12.7 percent probability that rates will be at 2.50-2.75 percent.
     
  • September 2019 meeting: Market is attaching 2.9 percent probability that rates will be at 2.00-2.25 percent, 84.8 percent probability that rates will be at 2.25-2.50 percent, and 12.3 percent probability that rates will be at 2.50-2.75 percent.
     
  • October 2019 meeting: Market is attaching 6.5 percent probability that rates will be at 2.00-2.25 percent, 81.7 percent probability that rates will be at 2.25-2.50 percent, and 11.8 percent probability that rates will be at 2.50-2.75 percent.
     
  • December 2019 meeting: Market is attaching 1 percent probability that rates will be at 1.75-2.00 percent, 16.4 percent probability that rates will be at 2.00-2.25 percent, and 72.3 percent probability that rates will be at 2.25-2.50 percent, and 10.3 percent probability that rates will be at 2.50-2.75 percent.
     

The probability is suggesting,

  • Since our last review a week ago, the probabilities have taken a turn from dovish to hawkish.
  • The market is just pricing one rate hike for 2019 with 10.3 percent probability, compared to a 3.7 percent a week ago and 8 percent in the week before that, which means that the market is pricing no rate hike in 2019, despite Fed’s forecast of two hikes.
  • The market is now pricing a rate cut in 2019 with 17.4 percent probability, compared to 25.6 percent a week ago.
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July 2 15:00 UTC Released

DKCurrency Reserves

Actual

449.6 Stale

Forecast

Previous

451.7 Stale

July 2 13:45 UTC Released

USISM NY Biz Conditions

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50 %

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48.6 %

January 31 00:00 UTC 811963811963m

ARAnnual Primary Balance*

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2016 bln ARS

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January 31 00:00 UTC 811963811963m

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2016 bln ARS

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Bln AR bln ARS

January 22 19:00 UTC 823783823783m

ARTrade Balance

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Previous

-1541 %

January 31 00:00 UTC 811963811963m

ARAnnual Primary Balance*

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Forecast

2016 bln ARS

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Bln AR bln ARS

January 22 19:00 UTC 823783823783m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 811963811963m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 811963811963m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 811963811963m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

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