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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 11th February)

  • March 2019 meeting: Market is attaching 98.7 percent probability that rates will be at 2.25-2.50 percent, and 1.3 percent probability that rates will be at 2.50-2.75 percent.
     
  • May 2019 meeting: Market is attaching 96.7 percent probability that rates will be at 2.25-2.50 percent, and 3.3 percent probability that rates will be at 2.50-2.75 percent.
     
  • June 2019 meeting: Market is attaching 96.7 percent probability that rates will be at 2.25-2.50 percent, and 3.3 percent probability that rates will be at 2.50-2.75 percent.
     
  • July 2019 meeting: Market is attaching 96.7 percent probability that rates will be at 2.25-2.50 percent, and 3.3 percent probability that rates will be at 2.50-2.75 percent.
     
  • September 2019 meeting: Market is 5.5 percent probability that rates will be at 2.00-2.25 percent, and 94.5 percent probability that rates will be at 2.25-2.50 percent.
     
  • October 2019 meeting: Market is 5.5 percent probability that rates will be at 2.00-2.25 percent, and 94.5 percent probability that rates will be at 2.25-2.50 percent.
     
  • December 2019 meeting: Market is 19.5 percent probability that rates will be at 2.00-2.25 percent, and 80.5 percent probability that rates will be at 2.25-2.50 percent.
     

The probability is suggesting,

  • Since our last review a week ago, the probabilities have loosened, as investors brace safe-haven assets.
  • The market is pricing just one rate hike for 2019 and that with just 0 percent probability, compared to a 4.1 percent a week ago and 26.2 percent in the week before that, which means that the market is far from pricing a rate hike in 2019, despite Fed’s forecast of two hikes.
  • The market is now pricing a rate cut in 2019 with 19.5 percent probability, compared to 8.4 percent a week ago, and 4.1 percent probability, a week before that.
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May 22 08:30 UTC Released

ZMBenchmark Interest Rate

Actual

10.25 %

Forecast

Previous

9.75 %

May 22 08:30 UTC Released

GBCPI NSA

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107.6 Index

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107 Index

January 31 00:00 UTC 686097686097m

ARAnnual Primary Balance*

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2016 bln ARS

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January 31 00:00 UTC 686097686097m

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2016 bln ARS

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January 22 19:00 UTC 697917697917m

ARTrade Balance

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-1541 %

January 31 00:00 UTC 686097686097m

ARAnnual Primary Balance*

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Forecast

2016 bln ARS

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Bln AR bln ARS

January 22 19:00 UTC 697917697917m

ARTrade Balance

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-1541 %

January 31 00:00 UTC 686097686097m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

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Bln AR bln ARS

January 31 00:00 UTC 686097686097m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 686097686097m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

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