RBA Raises Cash Rate to 4.10% in Closest Vote Since Transparent Voting Began 
China Holds Benchmark Loan Prime Rate Steady for Tenth Consecutive Month 
Global Central Banks Hold Rates Amid Iran War-Driven Energy Price Surge 
Fed Rate Cut Hopes Fade as Oil Prices Stoke Inflation Fears 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
BOJ Holds Interest Rates Steady Amid Middle East Uncertainty 
Bank of Japan Officials Signal Continued Interest Rate Hikes Amid Inflation Concerns 
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 4th March)
- 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 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.
- June 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.
- 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 attaching 92.2 percent probability that rates will be at 2.25-2.50 percent, and 7.8 percent probability that rates will be at 2.50-2.75 percent.
- October 2019 meeting: Market is attaching 90.2 percent probability that rates will be at 2.25-2.50 percent, and 9.7 percent probability that rates will be at 2.50-2.75 percent.
- December 2019 meeting: Market is attaching 90.2 percent probability that rates will be at 2.25-2.50 percent, and 9.7 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 somewhat tightened.
- The market is pricing just one rate hike for 2019 and that with just 9.7 percent probability, compared to a 4.5 percent a week ago and 1.8 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.
- However, the market is no longer pricing the possibility of a rate cut compared to 12.5 percent probability last week.
