BOJ Holds Interest Rates Steady, Upgrades Growth and Inflation Outlook for Japan 
BOJ Rate Decision in Focus as Yen Weakness and Inflation Shape Market Outlook 
RBA Expected to Raise Interest Rates by 25 Basis Points in February, ANZ Forecast Says 
Jerome Powell Attends Supreme Court Hearing on Trump Effort to Fire Fed Governor, Calling It Historic 
FOMC increased interest rates again in March and maintained its forecast for three rate hikes in 2018. FOMC also forecasted a faster pace of hikes next year than previously forecasted. March decision was unanimous. Current Federal funds rate - 150-175 bps (Note, all calculations are based on data as of 16th April)
- May 2018 meeting: Market is attaching 99.5 percent probability that rates will be at 1.50-1.75 percent, and 0.5 percent probability that rates will be at 1.75-2.00 percent.
- June 2018 meeting: Market is attaching 99.5 percent probability that rates will be at 1.75-2.00 percent, and 0.5 percent probability that rates will be at 2.00-2.25.
- August 2018 meeting: Market is attaching 93.5 percent probability that rates will be at 1.75-2.00 percent, and 6.5 percent probability that rates will be at 2.00-2.25 percent.
- September 2018 meeting: Market is attaching 29.6 percent probability that rates will be at 1.75-2.00 percent, 66 percent probability that rates will be at 2.00-2.25 percent, and 4.4 percent probability that rates will be at 2.25-2.50 percent.
- November 2018 meeting: Market is attaching 34.4 percent probability that rates will be at 1.75-2.00 percent, 61.4 percent probability that rates will be at 2.00-2.25 percent, 9.8 percent probability that rates will be at 2.25-2.50 percent, and 0.4 percent probability that rates will be at 2.50-2.75 percent.
- December 2018 meeting: Market is attaching 16 percent probability that rates will be at 1.75-2.00 percent, 46.3 percent probability that rates will be at 2.00-2.25 percent, 32.9 percent probability that rates will be at 2.25-2.50 percent, 4.6 percent probability that rates will be at 2.50-2.75 percent, and 0.2 percent probability that rates will be at 2.75-3.00 percent.
The probability is suggesting,
- Since our last review a week ago, the probability tightened for both near months and for far months.
- Next hike is priced in June with 99.5 percent probability, instead of 85.2 percent a week ago.
- The market brought forwarded the third hike for 2018 in September and pricing it with 70.4 percent probability compared to 51.3 percent a week ago.
- The market is pricing the fourth hike in December with 37.7 percent probability instead of 27.1 percent probability just a week ago.
FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest
