Menu

Search

  |   Commentary

Menu

  |   Commentary

Search

FxWirePro: Market increasingly turning dovish on Fed rate hikes

The bond market is increasingly turning dovish on rate hikes from the U.S. Federal Reserve. In September last year, the bond market was pricing two rate hikes from the U.S. Federal Reserve in 2019, while the Fed had forecasted three rate hikes. Since then it has gradually turned more dovish and in recent weeks, the pace has significantly increased.

Just a month ago, the bond market was pricing one rate hike in 2019 with 66 percent probability, and just a week ago, the probability was at 14 percent, a significant drop no doubt; but the bond market has turned more dovish since. Currently, it is pricing just 3.7 percent chance of a rate hike and 25.6 percent chance of a rate cut.

Bond market has always been instrumental in forecasting the actual rate hikes from the Federal Recession and to assess the recession probability, it is very likely this time that the market is currently overpricing the possibility of weakness in the U.S. economy, and underpricing the possibility of rate hikes from the Federal Reserve, just like it did for 2018 initially, leading to a rally in the USD once the repricing takes place.  

Currently, the USD is taking the heat as the bond market turn dovish, but that could change quickly if the economy proves to be performing well. 

  • ET PRO
  • Market Data

Market-moving news and views, 24 hours a day >

April 19 08:30 UTC Released

GRCbank C/A YY

Actual

-0.99 0

Forecast

Previous

-1.183 0

April 19 08:00 UTC Released

ITConsumer Confidence

Actual

110.5 %

Forecast

111.2 %

Previous

111.2 %

January 31 00:00 UTC 638457638457m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 638457638457m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 650277650277m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 638457638457m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 22 19:00 UTC 650277650277m

ARTrade Balance

Actual

Forecast

Previous

-1541 %

January 31 00:00 UTC 638457638457m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 638457638457m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

January 31 00:00 UTC 638457638457m

ARAnnual Primary Balance*

Actual

Forecast

2016 bln ARS

Previous

Bln AR bln ARS

Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.