These are the current US Fed hike expectations 10th october 2017

After the most recent Fed meeting in September, the probability(s) of hikes rose sharply leading markets to re-price 2018 projections and confirm that a December 2017 hike was almost certain.

Hikes as follows as per the CME Fed Watch Tool latest;

  • December 13th 2017, a fresh probability of 86.7% for a hike bringing the rate to the 1.25-1.50% range with a negligible probability of less than 5% for a range 1.50-1.75%
  • January 2018, the meeting has a probability of 11.5% for a range 1.00-1.25% (making December 2017 nailed on) and 83.6% probability for a range 1.25%-1.50%.  A 5% probability is given for a range 1.50%-1.75% holds.
  • March 2018 FOMC meeting attracts a probability of 8.3% that cash rates will be in the range of 1.00-1.25% with a probability of 63.3% that rates will be in the range 1.25-1.50%. A 27% probability of a range 1.50-1.75% and less than 2% probability for a range 1.75-2.00% cash rate.
  • May 2018, is worth noting in spite of the potential changes to the make-up of Fed members to come in 2018…… there is a 7.9% probability for rates in the range 1.00-1.25% and a 61% chance that rates will be set at between 1.25-1.50%, a 28.5% chance of a range 1.50-1.75% with 1.75-2.0% range a very slim 2.5%.  Above 2.0% is out of all probabilities at 0.1%

As stated, much depends upon changes to the Fed hierarchy and significant potential changes to the US economy and politics (with Trump`s desire for a lower USD in mind). With more than a 90% chance of a December 13th hike, it looks nailed on for now with USD not really pulling many roots up so far. We might see a long run in to December and a flurry as 1st December comes and goes.

2018 odds have definitely been upgraded significantly as a result of recent events and data.

Si Heath

Trader in Forex, Stocks, Apples and Pears.
Philosophy: "In every expert, there was once a beginner."

Read how Si got into trading here
Si Heath

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