BOJ Governor Ueda Meets Key Ministers as Markets Eye Policy Shifts Under New Leadership 
Indonesia Aims to Strengthen Rupiah as Central Bank Targets 16,400–16,500 Level 
Japan’s Finance Minister Signals Alignment With BOJ as Rate Hike Speculation Grows 
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 6th May)
- June 2019 meeting: Market is attaching 10 percent probability that rates will be at 2.00-2.25 percent, and 90 percent probability that rates will be at 2.25-2.50 percent.
- July 2019 meeting: Market is attaching 0.9 percent probability that rates will be at 1.75-2.00 percent, 17.4 percent probability that rates will be at 2.00-2.25 percent, and 81.7 percent probability that rates will be at 2.25-2.50 percent.
- September 2019 meeting: Market is attaching 4.9 percent probability that rates will be at 1.75-2.00 percent, 32.3 percent probability that rates will be at 2.00-2.25 percent, and 62.8 percent probability that rates will be at 2.25-2.50 percent.
- October 2019 meeting: Market is attaching 8 percent probability that rates will be at 1.75-2.00 percent, 35.2 percent probability that rates will be at 2.00-2.25 percent, and 56.8 percent probability that rates will be at 2.25-2.50 percent.
- December 2019 meeting: Market is attaching 2.6 percent probability that rates will be at 1.50-1.75 percent, 14.8 percent probability that rates will be at 1.75-2.00 percent, 40.9 percent probability that rates will be at 2.00-2.25 percent, and 41.7 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 tightened, despite several FOMC member hinting at rate cuts going ahead.
- The market is pricing the possibility of a rate cut with 58.3 percent probability, compared to 63.3 percent last week, and 43.7 percent in the week before that.
