Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Federal Reserve Faces Subpoena Delay Amid Investigation Into Chair Jerome Powell 
Bank of Korea Expected to Hold Interest Rates as Weak Won Limits Policy Easing 
BOJ Policymakers Warn Weak Yen Could Fuel Inflation Risks and Delay Rate Action 
U.S. Urges Japan on Monetary Policy as Yen Volatility Raises Market Concerns 
Bank of Canada Holds Interest Rate at 2.25% Amid Trade and Global Uncertainty 
RBA Raises Interest Rates by 25 Basis Points as Inflation Pressures Persist 
FOMC increased interest rates in March and maintained its forecast for three rate hikes in 2018. FOMC also forecasted a faster pace of hikes next year than previously forecasted. March decision was unanimous. Current Federal funds rate - 150-175 bps (Note, all calculations are based on data as of 16th April)
- June 2018 meeting: Market is attaching 95 percent probability that rates will be at 1.75-2.00 percent, and 5 percent probability that rates will be at 2.00-2.25.
- August 2018 meeting: Market is attaching 89.3 percent probability that rates will be at 1.75-2.00 percent, and 10.7 percent probability that rates will be at 2.00-2.25 percent.
- September 2018 meeting: Market is attaching 25 percent probability that rates will be at 1.75-2.00 percent, 67.2 percent probability that rates will be at 2.00-2.25 percent, and 7.8 percent probability that rates will be at 2.25-2.50 percent.
- November 2018 meeting: Market is attaching 22.7 percent probability that rates will be at 1.75-2.00 percent, 63.4 percent probability that rates will be at 2.00-2.25 percent, 13 percent probability that rates will be at 2.25-2.50 percent, and 0.9 percent probability that rates will be at 2.50-2.75 percent.
- December 2018 meeting: Market is attaching 11.4 percent probability that rates will be at 1.75-2.00 percent, 43.1 percent probability that rates will be at 2.00-2.25 percent, 38.2 percent probability that rates will be at 2.25-2.50 percent, 6.9 percent probability that rates will be at 2.50-2.75 percent, and 0.5 percent probability that rates will be at 2.75-3.00 percent.
The probability is suggesting,
- Since our last review a week ago, the probability has tightened for near month and eased for far months.
- Next hike is priced in June with 95 percent probability, instead of 93.8 percent a week ago.
- The market brought forwarded the third hike for 2018 in September and pricing it with 70 percent probability compared to 76.9 percent a week ago.
- The market is pricing the fourth hike in December with 45.6 percent probability instead of 48 percent probability just a week ago.
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