Federal Reserve Interest Rate Hike Forecast

02/21/2023 22:45 • Metaverse Matters • 86 views

According to CME’s “Federal Reserve observation”, the probability of the Federal Reserve raising interest rates by 25 basis points to 4.75% – 5.00% in March is 79% (81.9% yesterday), and the probability of raising interest rates by 50 basis points to 5.00% – 5.25% is 21.0%; The probability of a cumulative interest rate increase of 25 basis points by May is 8.3%, the probability of a cumulative interest rate increase of 50 basis points is 72.9%, and the probability of a cumulative interest rate increase of 75 basis points to 5.25% – 5.50% is 18.6%.

The probability that the Federal Reserve will raise interest rates by 25BP will drop slightly to 79%

Analysis based on this information:

The latest observation from CME’s Federal Reserve report suggests that the likelihood of the Federal Reserve raising interest rates in March is high, with a probability of 79%. This is a slight decrease from the previous day’s probability of 81.9%. The report also states that the probability of an increase in interest rates by 50 basis points to 5.00% – 5.25% is 21.0%.

Furthermore, the report predicts that there is a low likelihood of cumulative interest rate increases of 25 basis points by May, with a probability of only 8.3%. However, there is a strong chance of a cumulative interest rate increase of 50 basis points, estimated at 72.9%. Finally, the probability of a cumulative interest rate increase of 75 basis points, bringing it to 5.25% – 5.50%, is calculated to be 18.6%.

The report reflects the current status of the US economy and the Federal Reserve’s current policies. The Federal Reserve typically adjusts interest rates to manage inflation and economic growth. If the economy is growing too quickly or inflation is rising too fast, they will increase interest rates to help slow down spending and investment. Conversely, if the economy is slowing down or facing deflation, they will lower interest rates to encourage spending and investment.

The slight decrease in the probability of an interest rate hike in March can be attributed to the Federal Reserve’s cautious approach to the COVID-19 pandemic and its impact on the economy. The potential for further lockdowns and restrictions in the coming months may affect the decision to raise interest rates.

In conclusion, the CME’s Federal Reserve report provides valuable insights into the likelihood of interest rate changes in the coming months. Investors and businesses can use this information to make informed decisions about their investments and financial strategies.

Keywords:
Federal Reserve, Interest Rates, Probability

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Federal Reserve Interest Rate Hike Forecast

The probability that the Federal Reserve will raise interest rates by 25BP will drop slightly to 79%

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