Jerome Powell Attends Supreme Court Hearing on Trump Effort to Fire Fed Governor, Calling It Historic 
Bank of Japan Signals Readiness for Near-Term Rate Hike as Inflation Nears Target 
Fed Governor Lisa Cook Warns Inflation Risks Remain as Rates Stay Steady 
Why Trump’s new pick for Fed chair hit gold and silver markets – for good reasons 
BOJ Rate Decision in Focus as Yen Weakness and Inflation Shape Market Outlook 
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 17th June)
- June 2019 meeting: Market is attaching 15.8 percent probability that rates will be at 2.00-2.25 percent, and 84.2 percent probability that rates will be at 2.25-2.50 percent.
- July 2019 meeting: Market is attaching 12.8 percent probability that rates will be at 1.75-2.00 percent, 70.9 percent probability that rates will be at 2.00-2.25 percent, and 16.3 percent probability that rates will be at 2.25-2.50 percent.
- September 2019 meeting: Market is attaching 9.4 percent probability that rates will be at 1.50-1.75 percent, 55.7 percent probability that rates will be at 1.75-2.00 percent, 30.6 percent probability that rates will be at 2.00-2.25 percent, and 4.3 percent probability that rates will be at 2.25-2.50 percent.
- October 2019 meeting: Market is attaching 29 percent probability that rates will be at 1.50-1.75 percent, 46.8 percent probability that rates will be at 1.75-2.00 percent, 21.3 percent probability that rates will be at 2.00-2.25 percent, and 2.8 percent probability that rates will be at 2.25-2.50 percent.
- December 2019 meeting: Market is attaching 51.9 percent probability that rates will be at 1.50-1.75 percent, 33.3 percent probability that rates will be at 1.75-2.00 percent, 11.5 percent probability that rates will be at 2.00-2.25 percent, and 1.3 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 tightened for both the near month and the far months, on the back of stronger retail sales data.
- The market is pricing the possibility of a rate cut with 98.7 percent probability, compared to 99.1 percent last week, and 90.5 percent in the week before that. The market is pricing a second rate cut with 87.2 percent probability, compared to 90.5 percent a week ago. The market is also pricing a third rate cut with 53.9 percent probability, compared to 61.9 percent a week ago.
