What Is The Market Pricing In For The Fed In 2019?

• The vast majority of the market predicts the US policy rates to stay on hold in 2019, with some marginal part expecting a rate cut in December 2019.
• The market is still pricing no rate hike in 2019, despite Fed dot-plot forecasting two hikes in 2019.
• The FOMC is expected to stick to the newly established “patience” language in terms of the interest rate outlook. 

January 2019 meeting: Market is attaching 98.9% probability that rates remain at 2.25%-2.50% and 1.1% probability that rates will be at 2.50%-2.75%.
 
March 2019 meeting: Market is attaching 95.1% probability that rates will remain at 2.25%-2.50%  and 4.9 % probability that rates will be hiked to 2.50%-2.75%.
 
May 2019 meeting: Market is attaching 91.3% probability that rates will remain at 2.25%-2.50%  and 8.5%probability that rates will be hiked to 2.50%-2.75%.
 
June 2019 meeting: Market is attaching 78.3% probability that rates will remain at 2.25%-2.50%  and 20.2%probability that rates will be hiked to 2.50%-2.75%, and 1.5% probability that rates will be at 2.75%-3.00%.
 
July 2019 meeting: Market is attaching 75.9% probability that rates will remain at 2.25%-2.50%  and 24.5% probability that rates will be hiked to 2.50%-2.75%, and 3.0% probability that rates will be at 2.75%-3.00%.
 
September 2019 meeting: Market is attaching 72.3% probability that rates will remain at 2.25%-2.50%  and 22% probability that rates will be hiked to 2.50%-2.75%, and 2.1% probability that rates will be at 2.75%-3.00%.
 
October 2019 meeting: Market is attaching 72.3% probability that rates will remain at 2.25%-2.50%  and 22% probability that rates will be hiked to 2.50%-2.75%, and 2.1% probability that rates will be at 2.75%-3.00%
 
December 2019 meeting: Market is attaching 4.3% probability that rates will be at 2.00%-2.25%, 69.5% probability that rates will be at 2.25%-2.50% and 23.2% probability that rates will be at 2.50%-2.75%, and 3% probability that rates will be at 2.75%-3.00%t.