Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
FxWirePro: Daily Commodity Tracker - 21st March, 2022 
Fed Holds Interest Rates Steady as Kevin Warsh Says Rising Treasury Yields Tighten Financial Conditions 
Japan Government Backs Earlier BOJ Rate Hike as Inflation Pressures Build 
RBA Signals More Rate Hikes Possible as Australia Battles Stubborn Inflation 
Chile Central Bank Holds Interest Rate at 4.5% as Inflation and Global Risks Persist 
Eurozone Bond Yields Fall as Oil Slump Eases Inflation Fears Ahead of Central Bank Meetings 
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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 28th January)
- January 2019 meeting: Market is attaching 98.9 percent probability that rates will be at 2.25-2.50 percent, and 1.1 percent probability that rates will be at 2.50-2.75 percent.
- March 2019 meeting: Market is attaching 95.1 percent probability that rates will be at 2.25-2.50 percent, and 4.9 percent probability that rates will be at 2.50-2.75 percent.
- May 2019 meeting: Market is attaching 91.3 percent probability that rates will be at 2.25-2.50 percent, and 8.7 percent probability that rates will be at 2.50-2.75 percent.
- June 2019 meeting: Market is attaching 79.1 percent probability that rates will be at 2.25-2.50 percent, 19.5 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.
- July 2019 meeting: Market is 76.7 percent probability that rates will be at 2.25-2.50 percent, and 21.4 percent probability that rates will be at 2.50-2.75 percent, and 2 percent probability that rates will be at 2.75-3.00 percent.
- September 2019 meeting: Market is 72.3 percent probability that rates will be at 2.25-2.50 percent, and 24.5 percent probability that rates will be at 2.50-2.75 percent, and 3.2 percent probability that rates will be at 2.75-3.00 percent.
- October 2019 meeting: Market is 72.3 percent probability that rates will be at 2.25-2.50 percent, and 24.5 percent probability that rates will be at 2.50-2.75 percent, and 3.2 percent probability that rates will be at 2.75-3.00 percent.
- December 2019 meeting: Market is attaching 4.3 percent probability that rates will be at 2.00-2.25 percent, 69.5 percent probability that rates will be at 2.25-2.50 percent, and 23.2 percent probability that rates will be at 2.50-2.75 percent, and 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 somewhat.
- The market is pricing just one rate hike for 2019 with 26.2 percent probability, compared to a 23.4 percent a week ago and 10.8 percent in the week before that, which means that the market is still pricing no rate hike in 2019, despite Fed’s forecast of two hikes.
- The market is now pricing a rate cut in 2019 with 4.3 percent probability, compared to 4.4 percent a week ago, and 17.4 percent probability, a week before that.
