Australia Inflation Cools as Core CPI Misses Forecasts, Easing RBA Rate Hike Pressure 
Japan PM Sanae Takaichi Unveils Growth Plan as BOJ Independence Concerns Lift Bond Yields 
ECB Expected to Hold Rates as Middle East Tensions Keep September Hike in Focus 
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Fed Holds Interest Rates Steady as Kevin Warsh Says Rising Treasury Yields Tighten Financial Conditions 
Brazil Cuts Selic Rate to 14% as Inflation Eases but Risks Persist 
Japan Economy Minister Downplays Inflation Risks Despite BOJ Warning 
Singapore Central Bank’s Exchange Rate Policy Explained: Why MAS Uses the S$NEER Instead of Interest Rates 
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 18th March)
- March 2019 meeting: Market is attaching 1.3 percent probability that rates will be at 2.00-2.25 percent, and 98.7 percent probability that rates will be at 2.25-2.50 percent.
- May 2019 meeting: Market is attaching 3.2 percent probability that rates will be at 2.00-2.25 percent, and 96.7 percent probability that rates will be at 2.25-2.50 percent.
- June 2019 meeting: Market is attaching 9.7 percent probability that rates will be at 2.00-2.25 percent, and 90.3 percent probability that rates will be at 2.25-2.50 percent.
- July 2019 meeting: Market is attaching 13.4 percent probability that rates will be at 2.00-2.25 percent, and 86.6 percent probability that rates will be at 2.25-2.50 percent.
- September 2019 meeting: Market is attaching 17.4 percent probability that rates will be at 2.00-2.25 percent, and 82.6 percent probability that rates will be at 2.25-2.50 percent.
- October 2019 meeting: Market is attaching 19.2 percent probability that rates will be at 2.00-2.25 percent, and 80.8 percent probability that rates will be at 2.25-2.50 percent.
- December 2019 meeting: Market is attaching 26.4 percent probability that rates will be at 2.00-2.25 percent, and 73.6 percent probability that rates will be at 2.25-2.50 percent.
The probability is suggesting,
- Since our last review a week ago, the probabilities have significantly eased.
- The market is pricing no rate hike for 2019.
- However, the market is pricing the possibility of a rate cut with 26.4 percent probability, compared to 16.1 percent last week, and 0 percent in the week before that.
