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CME’s “Federal Reserve Observation” on Interest Rate Hike Probabilities

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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…

CMEs Federal Reserve Observation on Interest Rate Hike Probabilities

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 35.4%, and the probability of raising interest rates by 50 basis points to 5.00% – 5.25% is 64.6%; By May, the probability of a cumulative interest rate increase of 50 basis points is 28.7%, the probability of a cumulative interest rate increase of 75 basis points is 59.1%, and the probability of a cumulative interest rate increase of 100 basis points is 12.3%.

Before the non-agricultural announcement: the probability of the Federal Reserve raising interest rate by 50BP in March is 64.6%

Analysis based on this information:


CME’s “Federal Reserve Observation” report provides a glimpse into the probability of the Federal Reserve increasing interest rates in the coming months. According to the report, there is a 35.4% chance for an interest rate hike of 25 basis points to reach 4.75% to 5.00% in March, while the probability for an interest rate hike of 50 basis points to reach 5.00% to 5.25% is 64.6%. These figures indicate that the possibility of an interest rate hike in the near future is high.

Furthermore, the report also presents predictions for the probability of interest rate hikes in May. The probability of a cumulative interest rate increase of 50 basis points is 28.7%, indicating that there is still some uncertainty about the pace of interest rate hikes in the following month. However, the probability of a cumulative interest rate increase of 75 basis points is 59.1%, indicating that the probability of an interest rate hike in May is higher compared to March. Additionally, the report predicts a low probability (12.3%) of a cumulative interest rate increase of 100 basis points in May.

The increased probability of interest rate hikes suggests that the Federal Reserve is considering the current economic conditions and is contemplating suitable measures to curb inflation. The report indicates that inflationary pressures are rising and that the Federal Reserve’s next move is geared towards containing it. The report also suggests that the Federal Reserve’s plan may involve hiking interest rates by 50 basis points, thereby controlling the growing inflationary trend.

In summary, CME’s “Federal Reserve Observation” report provides a valuable insight into the probability of interest rate hikes, signaling that the Federal Reserve may take steps to address inflationary pressures. The report predicts a high probability of a 50 basis point interest rate hike in the near future, which is deemed necessary to curb inflation. Therefore, it is crucial for businesses and investors to stay aware of the Federal Reserve’s policies and adapt accordingly.

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