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 
ECB Signals Steady Interest Rates as Fed Risks Loom Over Outlook 
Fed Confirms Rate Meeting Schedule Despite Severe Winter Storm in Washington D.C. 
Bank of Canada Holds Interest Rate at 2.25% Amid Trade and Global Uncertainty 
RBA Expected to Raise Interest Rates by 25 Basis Points in February, ANZ Forecast Says 
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.
