BOJ Signals Imminent Interest Rate Hike Amid Strengthening Economic Conditions 
New RBNZ Governor Anna Breman Aims to Restore Stability After Tumultuous Years 
Japan’s Inflation Edges Higher in October as BOJ Faces Growing Pressure to Hike Rates 
Bank of Korea Holds Interest Rates Steady as Weak Won Limits Policy Flexibility 
Best Gold Stocks to Buy Now: AABB, GOLD, GDX 
RBA Signals Possible Rate Implications as Inflation Proves More Persistent 
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 93.8 percent probability that rates will be at 1.50-1.75 percent, and 6.2 percent probability that rates will be at 1.75-2.00 percent.
- June 2018 meeting: Market is attaching 93.8 percent probability that rates will be at 1.75-2.00 percent, and 6.2 percent probability that rates will be at 2.00-2.25.
- August 2018 meeting: Market is attaching 90 percent probability that rates will be at 1.75-2.00 percent, and 9.9 percent probability that rates will be at 2.00-2.25 percent.
- September 2018 meeting: Market is attaching 23.1 percent probability that rates will be at 1.75-2.00 percent, 69.5 percent probability that rates will be at 2.00-2.25 percent, and 7.5 percent probability that rates will be at 2.25-2.50 percent.
- November 2018 meeting: Market is attaching 20.7 percent probability that rates will be at 1.75-2.00 percent, 64.7 percent probability that rates will be at 2.00-2.25 percent, 13.5 percent probability that rates will be at 2.25-2.50 percent, and 1 percent probability that rates will be at 2.50-2.75 percent.
- December 2018 meeting: Market is attaching 10 percent probability that rates will be at 1.75-2.00 percent, 42 percent probability that rates will be at 2.00-2.25 percent, 40 percent probability that rates will be at 2.25-2.50 percent, 7.5 percent probability that rates will be at 2.50-2.75 percent, and 0.5 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 has eased but only marginally for both near and far months.
- Next hike is priced in June with 93.8 percent probability, instead of 98.4 percent a week ago.
- The market brought forwarded the third hike for 2018 in September and pricing it with 76.9 percent probability compared to 80.2 percent a week ago.
- The market is pricing the fourth hike in December with 48 percent probability instead of 48.3 percent probability just a week ago.
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