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BOJ Rate Decision in Focus as Yen Weakness and Inflation Shape Market Outlook 
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 3rd June)
- June 2019 meeting: Market is attaching 17.5 percent probability that rates will be at 2.00-2.25 percent, and 82.5 percent probability that rates will be at 2.25-2.50 percent.
- July 2019 meeting: Market is attaching 8.3 percent probability that rates will be at 1.75-2.00 percent, 48.4 percent probability that rates will be at 2.00-2.25 percent, and 43.3 percent probability that rates will be at 2.25-2.50 percent.
- September 2019 meeting: Market is attaching 32.9 percent probability that rates will be at 1.75-2.00 percent, 45.8 percent probability that rates will be at 2.00-2.25 percent, and 21.3 percent probability that rates will be at 2.25-2.50 percent.
- October 2019 meeting: Market is attaching 17.7 percent probability that rates will be at 1.50-1.75 percent, 36.7 percent probability that rates will be at 1.75-2.00 percent, 34.3 percent probability that rates will be at 2.00-2.25 percent, and 11.3 percent probability that rates will be at 2.25-2.50 percent.
- December 2019 meeting: Market is attaching 38.3 percent probability that rates will be at 1.50-1.75 percent, 35.4 percent probability that rates will be at 1.75-2.00 percent, 21.4 percent probability that rates will be at 2.00-2.25 percent, and 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 significantly eased for both the near month and the far months, as some FOMC members hinting at rate cuts going ahead.
- The market is pricing the possibility of a rate cut with 95 percent probability, compared to 74.3 percent last week, and 70.3 percent in the week before that. The market is pricing a second rate cut with 74.6 percent probability.
