Japan’s Finance Minister Signals Alignment With BOJ as Rate Hike Speculation Grows 
RBNZ Cuts Interest Rates Again as Inflation Cools and Recovery Remains Fragile 
UK Raises Deposit Protection Limit to £120,000 to Strengthen Saver Confidence 
Singapore Maintains Steady Monetary Outlook as Positive Output Gap Persists into 2025 
Japan’s Inflation Edges Higher in October as BOJ Faces Growing Pressure to Hike Rates 
RBI Cuts Repo Rate to 5.25% as Inflation Cools and Growth Outlook Strengthens 
BOK Expected to Hold Rates at 2.50% as Housing and Currency Pressures Persist 
RBA Reassesses Pricing Behaviors and Policy Impact Amid Inflation Pressures 
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 14th June)
- June 2019 meeting: Market is attaching 30.8 percent probability that rates will be at 2.00-2.25 percent, and 69.2 percent probability that rates will be at 2.25-2.50 percent.
- July 2019 meeting: Market is attaching 24.9 percent probability that rates will be at 1.75-2.00 percent, 61.7 percent probability that rates will be at 2.00-2.25 percent, and 13.4 percent probability that rates will be at 2.25-2.50 percent.
- September 2019 meeting: Market is attaching 19.5 percent probability that rates will be at 1.50-1.75 percent, 53.8 percent probability that rates will be at 1.75-2.00 percent, 23.8 percent probability that rates will be at 2.00-2.25 percent, and 2.9 percent probability that rates will be at 2.25-2.50 percent.
- October 2019 meeting: Market is attaching 39.1 percent probability that rates will be at 1.50-1.75 percent, 42.9 percent probability that rates will be at 1.75-2.00 percent, 16.2 percent probability that rates will be at 2.00-2.25 percent, and 1.8 percent probability that rates will be at 2.25-2.50 percent.
- December 2019 meeting: Market is attaching 61.9 percent probability that rates will be at 1.50-1.75 percent, 28.7 percent probability that rates will be at 1.75-2.00 percent, 8.6 percent probability that rates will be at 2.00-2.25 percent, and 0.9 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 for both the near month and far months, as some FOMC members hinting at rate cuts going ahead.
- The market is pricing the possibility of a rate cut with 99.1 percent probability, compared to 90.5 percent last week, and 74.3 percent in the week before that. The market is pricing a second rate cut with 90.5 percent probability. The market is also pricing a third rate cut with 61.9 percent probability.
