MAS Holds Monetary Policy Steady as Strong Growth Raises Inflation Risks 
RBA Deputy Governor Says November Inflation Slowdown Helpful but Still Above Target 
Japan Declines Comment on BOJ’s Absence From Global Support Statement for Fed Chair Powell. Source: Asturio Cantabrio, CC BY-SA 4.0, via Wikimedia Commons 
U.S. Urges Japan on Monetary Policy as Yen Volatility Raises Market Concerns 
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Federal Reserve Faces Subpoena Delay Amid Investigation Into Chair Jerome Powell 
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 24th September)
- September 2018 meeting: Market is attaching 92 percent probability that rates will be at 2.00-2.25 percent, and 8 percent probability that rates will be at 2.25-2.50 percent.
- November 2018 meeting: Market is attaching 92 percent probability that rates will be at 2.00-2.25 percent, and 8 percent probability that rates will be at 2.25-2.50 percent.
- December 2018 meeting: Market is attaching 12.8 percent probability that rates will be at 2.00-2.25 percent, 80.3 percent probability that rates will be at 2.25-2.50 percent, and 6.9 percent probability that rates will be at 2.50-2.75 percent.
- January 2019 meeting: Market is attaching 12.2 percent probability that rates will be at 2.00-2.25 percent, 77.4 percent probability that rates will be at 2.25-2.50 percent, and 10.3 percent probability that rates will be at 2.50-2.75 percent.
- March 2019 meeting: Market is attaching 5.9 percent probability that rates will be at 2.00-2.25 percent, 43.8 percent probability that rates will be at 2.25-2.50 percent, and 44.9 percent probability that rates will be at 2.50-2.75 percent, and 5.5 percent probability that rates will be at 2.75-3.00 percent.
- May 2019 meeting: Market is attaching 5.2 percent probability that rates will be at 2.00-2.25 percent, 39.2 percent probability that rates will be at 2.25-2.50 percent, and 44.7 percent probability that rates will be at 2.50-2.75 percent, and 10.9 percent probability that rates will be at 2.75-3.00 percent.
- June 2019 meeting: Market is attaching 2.8 percent probability that rates will be at 2.00-2.25 percent, 23.3 percent probability that rates will be at 2.25-2.50 percent, and 42.2 percent probability that rates will be at 2.50-2.75 percent, 26.2 percent probability that rates will be at 2.75-3.00 percent, 5.5 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 tightened for far months.
- The market is pricing the third hike for 2018 in September and pricing it with 100 percent probability, same as a week ago.
- The market is pricing the fourth hike in December with 87.2 percent probability compared to 80.3 percent a week ago.
- The first rate hike of 2019 is now brought forward by the market from June to March. The market is pricing the possibility of a rate hike in March next year with 50.4 percent probability.
- The possibility of a second hike in June is priced with 31.7 percent probability.
