High probability of Federal Reserve interest rate hike in March

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…

High probability of Federal Reserve interest rate hike in March

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%

Interpretation of the news:


The message from CME’s “Federal Reserve observation” suggests that there is a high probability of the Federal Reserve increasing interest rates by 25 basis points in March. This would take the interest rates to a range of 4.75% – 5.00%. The probability of this rate increase stands at 79%, a slight drop from yesterday’s 81.9%. The report also suggests that the probability of the Federal Reserve increasing interest rates by 50 basis points to a range of 5.00% – 5.25% is 21.0%.

The report further states that 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 much higher at 72.9%. The probability of a cumulative interest rate increase of 75 basis points to the range of 5.25% – 5.50% is 18.6%.

These probabilities are based on the Federal Reserve’s monetary policy plans, which are constantly monitored by CME. A higher probability of interest rate increases indicates that the market expects the Federal Reserve to tighten its monetary policy, which is a measure to control inflation.

The Federal Reserve’s interest rate decisions impact a wide range of economic activities, including borrowing, lending, and investment. Higher interest rates make borrowing more expensive and can lead to lower consumer spending, ultimately impacting economic growth. On the other hand, higher interest rates can also lead to increased savings, which can be beneficial in the long run.

In conclusion, the probability of the Federal Reserve increasing interest rates in March is high, with a 79% likelihood of interest rate hike by 25 basis points. The report also suggests an increased chance of a cumulative interest rate increase of 50 basis points by May. The message emphasizes the importance of monitoring the Federal Reserve’s monetary policy decisions, as it can impact a wide range of economic activities.

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