RBA Reassesses Pricing Behaviors and Policy Impact Amid Inflation Pressures 
BOJ’s Noguchi Calls for Cautious, Gradual Interest Rate Hikes to Sustain Inflation Goals 
Brazil Central Bank Plans $2 Billion Dollar Auctions to Support FX Liquidity 
RBNZ Cuts Interest Rates Again as Inflation Cools and Recovery Remains Fragile 
BOJ Governor Ueda Highlights Uncertainty Over Future Interest Rate Hikes 
Singapore Maintains Steady Monetary Outlook as Positive Output Gap Persists into 2025 
BOK Expected to Hold Rates at 2.50% as Housing and Currency Pressures Persist 
Indonesia Aims to Strengthen Rupiah as Central Bank Targets 16,400–16,500 Level 
Fed Officials Split as Powell Weighs December Interest Rate Cut 
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 28th January)
- January 2019 meeting: Market is attaching 98.9 percent probability that rates will be at 2.25-2.50 percent, and 1.1 percent probability that rates will be at 2.50-2.75 percent.
- March 2019 meeting: Market is attaching 95.1 percent probability that rates will be at 2.25-2.50 percent, and 4.9 percent probability that rates will be at 2.50-2.75 percent.
- May 2019 meeting: Market is attaching 91.3 percent probability that rates will be at 2.25-2.50 percent, and 8.7 percent probability that rates will be at 2.50-2.75 percent.
- June 2019 meeting: Market is attaching 79.1 percent probability that rates will be at 2.25-2.50 percent, 19.5 percent probability that rates will be at 2.50-2.75 percent, and 1.3 percent probability that rates will be at 2.75-3.00 percent.
- July 2019 meeting: Market is 76.7 percent probability that rates will be at 2.25-2.50 percent, and 21.4 percent probability that rates will be at 2.50-2.75 percent, and 2 percent probability that rates will be at 2.75-3.00 percent.
- September 2019 meeting: Market is 72.3 percent probability that rates will be at 2.25-2.50 percent, and 24.5 percent probability that rates will be at 2.50-2.75 percent, and 3.2 percent probability that rates will be at 2.75-3.00 percent.
- October 2019 meeting: Market is 72.3 percent probability that rates will be at 2.25-2.50 percent, and 24.5 percent probability that rates will be at 2.50-2.75 percent, and 3.2 percent probability that rates will be at 2.75-3.00 percent.
- December 2019 meeting: Market is attaching 4.3 percent probability that rates will be at 2.00-2.25 percent, 69.5 percent probability that rates will be at 2.25-2.50 percent, and 23.2 percent probability that rates will be at 2.50-2.75 percent, and 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 somewhat.
- The market is pricing just one rate hike for 2019 with 26.2 percent probability, compared to a 23.4 percent a week ago and 10.8 percent in the week before that, which means that the market is still pricing no rate hike in 2019, despite Fed’s forecast of two hikes.
- The market is now pricing a rate cut in 2019 with 4.3 percent probability, compared to 4.4 percent a week ago, and 17.4 percent probability, a week before that.
