RBA Deputy Governor Says November Inflation Slowdown Helpful but Still Above Target 
Jerome Powell Attends Supreme Court Hearing on Trump Effort to Fire Fed Governor, Calling It Historic 
Bank of Japan Likely to Delay Rate Hike Until July as Economists Eye 1% by September 
MAS Holds Monetary Policy Steady as Strong Growth Raises Inflation Risks 
ECB Signals Steady Interest Rates as Fed Risks Loom Over Outlook 
U.S. Prosecutors Investigate Fed Chair Jerome Powell Over Headquarters Renovation 
Bank of Canada Holds Interest Rate at 2.25% Amid Trade and Global Uncertainty 
Bank of Korea Expected to Hold Interest Rates as Weak Won Limits Policy Easing 
FOMC increased interest rates in March and June and increased its forecast from three rate hikes in 2018 to four rate hikes. June decision was unanimous. Current Federal funds rate - 175-200 bps (Note, all calculations are based on data as of 18th June)
- August 2018 meeting: Market is attaching 98 percent probability that rates will be at 1.75-2.00 percent, and 2 percent probability that rates will be at 2.00-2.25 percent.
- September 2018 meeting: Market is attaching 15.7 percent probability that rates will be at 1.75-2.00 percent, 82.6 percent probability that rates will be at 2.00-2.25 percent, and 1.7 percent probability that rates will be at 2.25-2.50 percent.
- November 2018 meeting: Market is attaching 14.9 percent probability that rates will be at 1.75-2.00 percent, 79.1 percent probability that rates will be at 2.00-2.25 percent, 5.9 percent probability that rates will be at 2.25-2.50 percent, and 0.1 percent probability that rates will be at 2.50-2.75 percent.
- December 2018 meeting: Market is attaching 5.9 percent probability that rates will be at 1.75-2.00 percent, 40.4 percent probability that rates will be at 2.00-2.25 percent, 50.1 percent probability that rates will be at 2.25-2.50 percent, and 3.7 percent probability that rates will be at 2.50-2.75 percent.
- January 2019 meeting: Market is attaching 5.3 percent probability that rates will be at 1.75-2.00 percent, 37.1 percent probability that rates will be at 2.00-2.25 percent, 49.1 percent probability that rates will be at 2.25-2.50 percent, and 8.1 percent probability that rates will be at 2.50-2.75 percent, and 0.4 percent probability that rates will be at 2.75-3.00 percent.
The probability is suggesting,
- Since our last review a week ago, the probabilities have spiked sharply.
- The market is pricing the third hike for 2018 in September and pricing it with 83.3 percent probability compared to 67.4 percent a week ago.
- The market is pricing the fourth hike in December with 53.4 percent probability instead of 41.4 percent probability just a week ago.
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