BOJ Governor Ueda Meets Key Ministers as Markets Eye Policy Shifts Under New Leadership 
Kazakhstan Central Bank Holds Interest Rate at 18% as Inflation Pressures Persist 
RBA Reassesses Pricing Behaviors and Policy Impact Amid Inflation Pressures 
BOJ’s Noguchi Calls for Cautious, Gradual Interest Rate Hikes to Sustain Inflation Goals 
Japan’s Inflation Edges Higher in October as BOJ Faces Growing Pressure to Hike Rates 
RBNZ Cuts Interest Rates Again as Inflation Cools and Recovery Remains Fragile 
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 15th July)
- July 2019 meeting: Market is attaching 25.6 percent probability that rates will be at 1.75-2.00 percent, and 74.4 percent probability that rates will be at 2.00-2.25 percent.
- September 2019 meeting: Market is attaching 15.3 percent probability that rates will be at 1.50-1.75 percent, 54.9 percent probability that rates will be at 1.75-2.00 percent, and 29.8 percent probability that rates will be at 2.25-2.50 percent.
- October 2019 meeting: Market is attaching 6.2 percent probability that rates will be at 1.25-1.50 percent, 31.4 percent probability that rates will be at 1.50-1.75 percent, 44.7 percent probability that rates will be at 1.75-2.00 percent, and 17.7 percent probability that rates will be at 2.00-2.25 percent.
- December 2019 meeting: Market is attaching 17.3 percent probability that rates will be at 1.25-1.50 percent, 36.1 percent probability that rates will be at 1.50-1.75 percent, 35.1 percent probability that rates will be at 1.75-2.00 percent, and 11.4 percent probability that rates will be at 2.00-2.25 percent.
The probability is suggesting,
- Since our last review a week ago, the probabilities have eased on the back of several Fed speakers signaling rate cuts.
- The market is pricing the possibility of a rate cut with 100 percent probability, compared to 100 percent last week.
- The market is pricing a second rate cut with 89.6 percent probability, compared to 88.8 percent a week ago, and 90.3 percent in the week before that.
- The market is also pricing a third rate cut in 2019 with 53.5 percent probability, compared to 49.4 percent a week ago, and 53.6 percent in the week before that.
- The first rate cut is priced in July 2019 with 100 percent probability. The second rate cut is priced in October with 82.3 percent probability.
