J.P. Morgan Now Expects Two ECB Rate Hikes Amid Inflation Pressures 
China Holds Benchmark Loan Prime Rate Steady for Tenth Consecutive Month 
Goldman Sachs Delays Bank of England Rate Cut Forecast Amid Middle East Inflation Risks 
Bank of Japan Officials Signal Continued Interest Rate Hikes Amid Inflation Concerns 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Bank of Japan Unveils New Inflation Gauge to Support Case for Future Rate Hikes 
Taiwan Central Bank Expected to Hold Interest Rates Steady Through 2027 
RBA Raises Cash Rate to 4.10% in Closest Vote Since Transparent Voting Began 
FOMC increased interest rates again in March and maintained its forecast for three rate hikes in 2018. FOMC also forecasted a faster pace of hikes next year than previously forecasted. March decision was unanimous. Current Federal funds rate - 150-175 bps (Note, all calculations are based on data as of 9th April)
- May 2018 meeting: Market is attaching 98.4 percent probability that rates will be at 1.50-1.75 percent, and 1.6 percent probability that rates will be at 1.75-2.00 percent.
- June 2018 meeting: Market is attaching 14.8 percent probability that rates will be at 1.50-1.75 percent, 83.9 percent probability that rates will be at 1.75-2.00 percent, and 1.3 percent probability that rates will be at 2.00-2.25.
- August 2018 meeting: Market is attaching 13.9 percent probability that rates will be at 1.50-1.75 percent, 79.8 percent probability that rates will be at 1.75-2.00 percent, 6.3 percent probability that rates will be at 2.00-2.25 percent, and 0.1 percent probability that rates will be at 2.25-2.50 percent.
- September 2018 meeting: Market is attaching 7.5 percent probability that rates will be at 1.50-1.75 percent, 41.3 percent probability that rates will be at 1.75-2.00 percent, 46.8 percent probability that rates will be at 2.00-2.25 percent, 4.4 percent probability that rates will be at 2.25-2.50 percent, and 0.1 percent probability that rates will be at 2.50-2.75 percent.
- November 2018 meeting: Market is attaching 6.8 percent probability that rates will be at 1.50-1.75 percent, 38.2 percent probability that rates will be at 1.75-2.00 percent, 46.3 percent probability that rates will be at 2.00-2.25 percent, 8.3 percent probability that rates will be at 2.25-2.50 percent, and 0.5 percent probability that rates will be at 2.50-2.75 percent.
- December 2018 meeting: Market is attaching 4.1 percent probability that rates will be at 1.50-1.75 percent, 25.7 percent probability that rates will be at 1.75-2.00 percent, 43.1 percent probability that rates will be at 2.00-2.25 percent, 23.3 percent probability that rates will be at 2.25-2.50 percent, 3.6 percent probability that rates will be at 2.50-2.75 percent, and 0.2 percent probability that rates will be at 2.75-3.00 percent.
The probability is suggesting,
- Since our last review a week ago, the probability tightened for near month and eased for far months.
- Next hike is priced in June with 85.2 percent probability, instead of 80.5 percent a week ago.
- The market brought forwarded the third hike for 2018 in September and pricing it with 51.3 percent probability compared to 55.3 percent a week ago.
- The market is pricing the fourth hike in December with 27.1 percent probability instead of 31.8 percent probability just a week ago.
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