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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 15th July)

  • July 2019 meeting: Market is attaching 25.6 percent probability that rates will be at 1.75-2.00 percent, and 74.4 percent probability that rates will be at 2.00-2.25 percent.
     
  • September 2019 meeting: Market is attaching 15.3 percent probability that rates will be at 1.50-1.75 percent, 54.9 percent probability that rates will be at 1.75-2.00 percent, and 29.8 percent probability that rates will be at 2.25-2.50 percent.
     
  • October 2019 meeting: Market is attaching 6.2 percent probability that rates will be at 1.25-1.50 percent, 31.4 percent probability that rates will be at 1.50-1.75 percent, 44.7 percent probability that rates will be at 1.75-2.00 percent, and 17.7 percent probability that rates will be at 2.00-2.25 percent.
     
  • December 2019 meeting: Market is attaching 17.3 percent probability that rates will be at 1.25-1.50 percent, 36.1 percent probability that rates will be at 1.50-1.75 percent, 35.1 percent probability that rates will be at 1.75-2.00 percent, and 11.4 percent probability that rates will be at 2.00-2.25 percent.
     

The probability is suggesting,

  • Since our last review a week ago, the probabilities have eased on the back of several Fed speakers signaling rate cuts.
  • The market is pricing the possibility of a rate cut with 100 percent probability, compared to 100 percent last week.  
  • The market is pricing a second rate cut with 89.6 percent probability, compared to 88.8 percent a week ago, and 90.3 percent in the week before that.
  • The market is also pricing a third rate cut in 2019 with 53.5 percent probability, compared to 49.4 percent a week ago, and 53.6 percent in the week before that.
  • The first rate cut is priced in July 2019 with 100 percent probability. The second rate cut is priced in October with 82.3 percent probability. 
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July 2 15:00 UTC Released

DKCurrency Reserves

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449.6 Stale

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Previous

451.7 Stale

July 2 13:45 UTC Released

USISM NY Biz Conditions

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50 %

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48.6 %

January 31 00:00 UTC 823434823434m

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January 31 00:00 UTC 823434823434m

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2016 bln ARS

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January 22 19:00 UTC 835254835254m

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-1541 %

January 31 00:00 UTC 823434823434m

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2016 bln ARS

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January 22 19:00 UTC 835254835254m

ARTrade Balance

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-1541 %

January 31 00:00 UTC 823434823434m

ARAnnual Primary Balance*

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2016 bln ARS

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Bln AR bln ARS

January 31 00:00 UTC 823434823434m

ARAnnual Primary Balance*

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2016 bln ARS

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Bln AR bln ARS

January 31 00:00 UTC 823434823434m

ARAnnual Primary Balance*

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Forecast

2016 bln ARS

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Bln AR bln ARS

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