Charts of the Week
September 2017 U.S. Federal Reserve Rate Odds
Chart of the Week for September 22, 2017 - September 28, 2017
On September 20, 2017, the Federal Open Market Committee ("FOMC") of the U.S. Federal Reserve Board announced that the target rate range of the Federal Funds Rate ("Fed Funds") would remain unchanged. Target rate range changes are one of the most widely monitored economic indicators and expectations of a rate change can impact markets. The chart above shows the probabilities of an increase in the Fed Funds target rate range at the FOMC's September 2017 meeting beginning in January 2017, which is compiled by Bloomberg based on Fed Funds futures trading data.
The probability of a change can move rapidly based on domestic or global events. From January through June 2017, the predictions were for at least a 79% chance of an increase in September. In June 2017, the probability was 93%, but the FOMC raised the target rate range that month and also indicated they would change their balance sheet management by not reinvesting the proceeds of maturing securities. By the beginning of July and August, the chances of an increase had dropped to 22% and 6% respectively. The range was not increased in September and the probability of a rate increase from the FOMC in December 2017 was 60% as of September 20, 2107.
Posted by: sarah_oz@yahoo.com
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