Federal Reserve’s 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

Federal Reserves 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%. (The same as before the announcement of non-agriculture)

After the announcement of non-agriculture: the probability of the Federal Reserve raising interest rate by 50BP in March is 64.6%, which is the same as before the data release

Analysis based on this information:


The Federal Reserve’s decision to raise interest rates has been closely monitored by investors and economists alike since it has a significant impact on the economy. The probability of a cumulative interest rate hike of up to 100 basis points in March is outlined in the CME’s “Federal Reserve Observation.” According to the report, there is a 35.4% chance of a 25 basis point interest rate hike to 4.75% – 5.00% and a 64.6% chance of a 50 basis point interest rate hike to 5.00% – 5.25%.

The Fed has been increasing interest rates gradually as part of its strategy to stabilize inflation rates and maintain a well-performing economy. The interest rate hike has a ripple effect throughout the economy, touching every sector, from businesses to consumers. An interest rate hike affects the lending and borrowing habits of the public, impacting both personal and corporate debt.

According to the Federal Reserve Chairman, Jerome Powell, the US economy is growing at a steady rate, with an unemployment rate of 3.5% and inflation below 2%. The economy’s growth is a contributing factor to the expectations of an interest rate hike in March, given that interest rate hikes can serve as a means to reduce inflation.

By May, the report predicts a 28.7% probability of a cumulative interest rate hike of 50 basis points, 59.1% for a 75 basis point hike, and a 12.3% chance of a cumulative 100 basis point hike. These predictions indicate a continuation of the Fed’s interest rate hike policy to keep inflation in check while balancing growth.

In conclusion, based on the CME’s “Federal Reserve Observation”, the interest rate hike probability remains relatively high. The report suggests that the continuation of the Federal Reserve’s interest rate hike policy is a necessary step to maintain economic stability. Consequently, businesses and investors should prepare for potential interest rate hikes, and consumers should consider refinancing their loans before the hike takes place.

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