BOJ’s Noguchi Calls for Cautious, Gradual Interest Rate Hikes to Sustain Inflation Goals 
RBI Cuts Repo Rate to 5.25% as Inflation Cools and Growth Outlook Strengthens 
Fed Rate Cut Odds Rise as December Decision Looks Increasingly Divided 
Fed Officials Split as Powell Weighs December Interest Rate Cut 
Brazil Central Bank Plans $2 Billion Dollar Auctions to Support FX Liquidity 
BOJ Faces Pressure for Clarity, but Neutral Rate Estimates Likely to Stay Vague 
RBA Reassesses Pricing Behaviors and Policy Impact Amid Inflation Pressures 
RBNZ Cuts Interest Rates Again as Inflation Cools and Recovery Remains Fragile 
Kazakhstan Central Bank Holds Interest Rate at 18% as Inflation Pressures Persist 
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 15th April)
- May 2019 meeting: Market is attaching 0.5 percent probability that rates will be at 2.00-2.25 percent, and 99.5 percent probability that rates will be at 2.25-2.50 percent.
- June 2019 meeting: Market is attaching 10.4 percent probability that rates will be at 2.00-2.25 percent, and 89.6 percent probability that rates will be at 2.25-2.50 percent.
- July 2019 meeting: Market is attaching 12.3 percent probability that rates will be at 2.00-2.25 percent, and 87.7 percent probability that rates will be at 2.25-2.50 percent.
- September 2019 meeting: Market is attaching 28.4 percent probability that rates will be at 2.00-2.25 percent, and 71.6 percent probability that rates will be at 2.25-2.50 percent.
- October 2019 meeting: Market is attaching 31.6 percent probability that rates will be at 2.00-2.25 percent, and 68.4 percent probability that rates will be at 2.25-2.50 percent.
- December 2019 meeting: Market is attaching 0.7 percent probability that rates will be at 1.50-1.75 percent, 7.4 percent probability that rates will be at 1.75-2.00 percent, 34.5 percent probability that rates will be at 2.00-2.25 percent, and 57.3 percent probability that rates will be at 2.25-2.50 percent.
The probability is suggesting,
- Since our last review a week ago, the probabilities have sizably tightened but still quite dovish.
- The market is pricing the possibility of a rate cut with 42.7 percent probability, compared to 53.5 percent last week, and 58 percent in the week before that.
