Federal Reserve Faces Subpoena Delay Amid Investigation Into Chair Jerome Powell 
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 
Bank of Korea Expected to Hold Interest Rates as Weak Won Limits Policy Easing 
U.S. Urges Japan on Monetary Policy as Yen Volatility Raises Market Concerns 
New York Fed President John Williams Signals Rate Hold as Economy Seen Strong in 2026 
BOJ Rate Decision in Focus as Yen Weakness and Inflation Shape Market Outlook 
Bank of England Expected to Hold Interest Rates at 3.75% as Inflation Remains Elevated 
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 27th May)
- June 2019 meeting: Market is attaching 3.3 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.
- July 2019 meeting: Market is attaching 0.4 percent probability that rates will be at 1.75-2.00 percent, 14.9 percent probability that rates will be at 2.00-2.25 percent, and 84.7 percent probability that rates will be at 2.25-2.50 percent.
- September 2019 meeting: Market is attaching 5.2 percent probability that rates will be at 1.75-2.00 percent, 37.4 percent probability that rates will be at 2.00-2.25 percent, and 57.3 percent probability that rates will be at 2.25-2.50 percent.
- October 2019 meeting: Market is attaching 14 percent probability that rates will be at 1.75-2.00 percent, 42.1 percent probability that rates will be at 2.00-2.25 percent, and 43.8 percent probability that rates will be at 2.25-2.50 percent.
- December 2019 meeting: Market is attaching 6.6 percent probability that rates will be at 1.50-1.75 percent, 24.9 percent probability that rates will be at 1.75-2.00 percent, 42.8 percent probability that rates will be at 2.00-2.25 percent, and 25.7 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 tightened for near month and eased for the December month, as some FOMC members hinting at rate cuts going ahead.
- The market is pricing the possibility of a rate cut with 74.3 percent probability, compared to 70.3 percent last week, and 57.3 percent in the week before that.
