ECB Set to Raise Interest Rates as Energy Shock Fuels Eurozone Inflation Concerns 
RBI Hits Pause as Geopolitical Storm Clouds Gather 
BOJ Rate Hike Expected to Boost Yen, Impact USD/JPY and Nikkei 
South Korea Signals Possible Interest Rate Hike as Inflation Remains Elevated 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Goldman Sachs Sees Fed Holding Interest Rates Steady Until 2027 
Best Gold Stocks to Buy Now: AABB, GOLD, GDX 
ECB Keeps July Rate Options Open Amid Iran War Energy Price Risks 
Kevin Warsh Faces Early Fed Test as Inflation Risks Challenge Rate-Cut Expectations 
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 20th August)
- September 2018 meeting: Market is attaching 4 percent probability that rates will be at 1.75-2.00 percent, and 96 percent probability that rates will be at 2.00-2.25 percent.
- November 2018 meeting: Market is attaching 4 percent probability that rates will be at 1.75-2.00 percent, and 96 percent probability that rates will be at 2.00-2.25 percent.
- December 2018 meeting: Market is attaching 1.2 percent probability that rates will be at 1.75-2.00 percent, 32.6 percent probability that rates will be at 2.00-2.25 percent, and 66.1 percent probability that rates will be at 2.25-2.50 percent.
- January 2019 meeting: Market is attaching 1.2 percent probability that rates will be at 1.75-2.00 percent, 31.3 percent probability that rates will be at 2.00-2.25 percent, 64.7 percent probability that rates will be at 2.25-2.50 percent, and 2.8 percent probability that rates will be at 2.50-2.75 percent.
- March 2019 meeting: Market is attaching 0.6 percent probability that rates will be at 1.75-2.00 percent, 17.3 percent probability that rates will be at 2.00-2.25 percent, 49.2 percent probability that rates will be at 2.25-2.50 percent, and 31.6 percent probability that rates will be at 2.50-2.75 percent, and 1.3 percent probability that rates will be at 2.75-3.00 percent.
- May 2019 meeting: Market is attaching 0.6 percent probability that rates will be at 1.75-2.00 percent, 15.8 percent probability that rates will be at 2.00-2.25 percent, 46.3 percent probability that rates will be at 2.25-2.50 percent, and 33.2 percent probability that rates will be at 2.50-2.75 percent, and 4.1 percent probability that rates will be at 2.75-3.00 percent.
- June 2019 meeting: Market is attaching 0.4 percent probability that rates will be at 1.75-2.00 percent, 10.5 percent probability that rates will be at 2.00-2.25 percent, 35.6 percent probability that rates will be at 2.25-2.50 percent, and 37.8 percent probability that rates will be at 2.50-2.75 percent, 14.2 percent probability that rates will be at 2.75-3.00 percent, 1.5 percent probability that rates will be at 3.00-3.25 percent.
The probability is suggesting,
- Since our last review a week ago, the probabilities have eased for far months.
- The market is pricing the third hike for 2018 in September and pricing it with 96 percent probability compared to 93.6 percent a week ago.
- The market is pricing the fourth hike in December with 66.1 percent probability instead of 61.3 percent probability just a week ago.
- The first rate hike of 2019 is priced in June with 53.5 percent probability, instead of 50.9 percent probability just a week ago.
