RBA Raises Cash Rate to 4.10% in Closest Vote Since Transparent Voting Began 
BOJ Holds Interest Rates Steady Amid Middle East Uncertainty 
Bank of Japan Holds Rates Steady Amid Inflation Concerns and Yen Weakness 
Fed Holds Rates Steady as Middle East Conflict Clouds Inflation Outlook 
Bank of Japan Governor Signals Gradual Progress Toward 2% Inflation Target 
Goldman Sachs Raises ECB Rate Hike Forecast Amid Persistent Energy-Driven Inflation 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Fed Rate Cut Hopes Fade as Oil Prices Stoke Inflation Fears 
ANZ and Westpac Forecast Two RBA Rate Hikes in March and May 2026 
Global Central Banks Hold Rates Amid Iran War-Driven Energy Price Surge 
FOMC followed through its promise and hiked rates four times in 2018 and forecasted two more rate hikes for 2019. Current Federal funds rate - 225-250 bps (Note, all calculations are based on data as of 28th January)
- January 2019 meeting: Market is attaching 98.9 percent probability that rates will be at 2.25-2.50 percent, and 1.1 percent probability that rates will be at 2.50-2.75 percent.
- March 2019 meeting: Market is attaching 95.1 percent probability that rates will be at 2.25-2.50 percent, and 4.9 percent probability that rates will be at 2.50-2.75 percent.
- May 2019 meeting: Market is attaching 91.3 percent probability that rates will be at 2.25-2.50 percent, and 8.7 percent probability that rates will be at 2.50-2.75 percent.
- June 2019 meeting: Market is attaching 79.1 percent probability that rates will be at 2.25-2.50 percent, 19.5 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.
- July 2019 meeting: Market is 76.7 percent probability that rates will be at 2.25-2.50 percent, and 21.4 percent probability that rates will be at 2.50-2.75 percent, and 2 percent probability that rates will be at 2.75-3.00 percent.
- September 2019 meeting: Market is 72.3 percent probability that rates will be at 2.25-2.50 percent, and 24.5 percent probability that rates will be at 2.50-2.75 percent, and 3.2 percent probability that rates will be at 2.75-3.00 percent.
- October 2019 meeting: Market is 72.3 percent probability that rates will be at 2.25-2.50 percent, and 24.5 percent probability that rates will be at 2.50-2.75 percent, and 3.2 percent probability that rates will be at 2.75-3.00 percent.
- December 2019 meeting: Market is attaching 4.3 percent probability that rates will be at 2.00-2.25 percent, 69.5 percent probability that rates will be at 2.25-2.50 percent, and 23.2 percent probability that rates will be at 2.50-2.75 percent, and 3 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 tightened somewhat.
- The market is pricing just one rate hike for 2019 with 26.2 percent probability, compared to a 23.4 percent a week ago and 10.8 percent in the week before that, which means that the market is still pricing no rate hike in 2019, despite Fed’s forecast of two hikes.
- The market is now pricing a rate cut in 2019 with 4.3 percent probability, compared to 4.4 percent a week ago, and 17.4 percent probability, a week before that.
