China Extends Gold Buying Streak as Reserves Surge Despite Volatile Prices 
RBI Holds Repo Rate at 5.25% as India’s Growth Outlook Strengthens After U.S. Trade Deal 
RBA Expected to Raise Interest Rates by 25 Basis Points in February, ANZ Forecast Says 
Fed Governor Lisa Cook Warns Inflation Risks Remain as Rates Stay Steady 
FOMC increased interest rates in March and June and increased its forecast from three rate hikes in 2018 to four rate hikes. June decision was unanimous. Current Federal funds rate - 175-200 bps (Note, all calculations are based on data as of 9th July)
- August 2018 meeting: Market is attaching 98.5 percent probability that rates will be at 1.75-2.00 percent, and 1.5 percent probability that rates will be at 2.00-2.25 percent.
- September 2018 meeting: Market is attaching 18.1 percent probability that rates will be at 1.75-2.00 percent, 80.7 percent probability that rates will be at 2.00-2.25 percent, and 1.2 percent probability that rates will be at 2.25-2.50 percent.
- November 2018 meeting: Market is attaching 17.2 percent probability that rates will be at 1.75-2.00 percent, 77.4 percent probability that rates will be at 2.00-2.25 percent, and 5.5 percent probability that rates will be at 2.25-2.50 percent.
- December 2018 meeting: Market is attaching 6.2 percent probability that rates will be at 1.75-2.00 percent, 40.2 percent probability that rates will be at 2.00-2.25 percent, 50.8 percent probability that rates will be at 2.25-2.50 percent, and 2.7 percent probability that rates will be at 2.50-2.75 percent.
- January 2019 meeting: Market is attaching 5.5 percent probability that rates will be at 1.75-2.00 percent, 36.6 percent probability that rates will be at 2.00-2.25 percent, 49.7 percent probability that rates will be at 2.25-2.50 percent, and 7.9 percent probability that rates will be at 2.50-2.75 percent, and 0.3 percent probability that rates will be at 2.75-3.00 percent.
The probability is suggesting,
- Since our last review a week ago, the probabilities have tightened for both the near month and far month.
- The market is pricing the third hike for 2018 in September and pricing it with 80.7 percent probability compared to 75.3 percent a week ago.
- The market is pricing the fourth hike in December with 53.5 percent probability instead of 47.5 percent probability just a week ago.
- The market has started pricing the fourth rate hike with more than 50 percent probability.
