BOJ Governor Ueda Highlights Uncertainty Over Future Interest Rate Hikes 
RBA Signals Possible Rate Implications as Inflation Proves More Persistent 
Fed Meeting Sparks Division as Markets Brace for Possible Rate Cut 
RBNZ Cuts Interest Rates Again as Inflation Cools and Recovery Remains Fragile 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
FxWirePro: Daily Commodity Tracker - 21st March, 2022 
BOJ Seen Moving Toward December Rate Hike as Yen Slides 
Fed Officials Split as Powell Weighs December Interest Rate Cut 
Fed Rate Cut Odds Rise as December Decision Looks Increasingly Divided 
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.
