RBA Rate Hike Outlook: Impact on AUD/USD and ASX 200 
BOJ Rate Hike Expectations Grow as Board Member Signals Hawkish Stance 
ECB Signals Possible Interest Rate Move if Inflation Outlook Fails to Improve 
Bank of England Set to Hold Interest Rates as Inflation Risks and Iran War Impact Loom 
Bank of Japan's Ueda Flags Low Real Interest Rates as Key Factor in Rate Hike Timing 
Paraguay Holds Interest Rate at 5.5% as Inflation Remains Stable Amid Global Uncertainty 
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 14th June)
- June 2019 meeting: Market is attaching 30.8 percent probability that rates will be at 2.00-2.25 percent, and 69.2 percent probability that rates will be at 2.25-2.50 percent.
- July 2019 meeting: Market is attaching 24.9 percent probability that rates will be at 1.75-2.00 percent, 61.7 percent probability that rates will be at 2.00-2.25 percent, and 13.4 percent probability that rates will be at 2.25-2.50 percent.
- September 2019 meeting: Market is attaching 19.5 percent probability that rates will be at 1.50-1.75 percent, 53.8 percent probability that rates will be at 1.75-2.00 percent, 23.8 percent probability that rates will be at 2.00-2.25 percent, and 2.9 percent probability that rates will be at 2.25-2.50 percent.
- October 2019 meeting: Market is attaching 39.1 percent probability that rates will be at 1.50-1.75 percent, 42.9 percent probability that rates will be at 1.75-2.00 percent, 16.2 percent probability that rates will be at 2.00-2.25 percent, and 1.8 percent probability that rates will be at 2.25-2.50 percent.
- December 2019 meeting: Market is attaching 61.9 percent probability that rates will be at 1.50-1.75 percent, 28.7 percent probability that rates will be at 1.75-2.00 percent, 8.6 percent probability that rates will be at 2.00-2.25 percent, and 0.9 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 far months, as some FOMC members hinting at rate cuts going ahead.
- The market is pricing the possibility of a rate cut with 99.1 percent probability, compared to 90.5 percent last week, and 74.3 percent in the week before that. The market is pricing a second rate cut with 90.5 percent probability. The market is also pricing a third rate cut with 61.9 percent probability.
