CME FedWatch Tool Shows 75.8% Probability of a December Rate Hike

Traders of U.S. short-term interest-rate futures on Wednesday stuck with bets the Federal Reserve will raise rates once more this year and twice next year after the U.S. central bank ended a two-day meeting, as expected, with no change to interest rates.



Contracts tied to the Fed’s policy rate that are traded at CME Group’s Chicago Board of Trade pared earlier losses after the Fed slightly downgraded its description of business investment, saying growth had moderated since earlier in the year. Still, the pricing of the contracts continued to signal expectations for a Fed rate hike next month, and two further hikes in 2019. That is one less 2019 rate hike than the Fed signaled when it last released forecasts in September.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza