Prime Rate

also known as the Fed, National or United States Prime Rate,
from the interest-rate specialists at www.FedPrimeRate.comSM

Friday, December 02, 2016

Odds At 97.2% (Extremely Likely) The U.S. Prime Rate Will Rise To 3.75% At The December 14, 2016 FOMC Monetary Policy Meeting

Prime Rate Forecast
Prime Rate Forecast
Latest Prime Rate Forecast

As of right now, the investors who trade in fed fund futures have odds at 97.2% (as implied by current pricing on contracts) that the Federal Open Market Committee (FOMC) will vote raise the target range for the benchmark fed funds rate by 25 basis points (0.25 percentage point), to 0.5% - 0.75%, at the December 14TH, 2016 monetary policy meeting (extremely likely.)

The current United States Prime Rate, which went into effect on December 17, 2015, is 3.5%.  A 25 basis point rate hike on December 14TH would cause the U.S. Prime Rate to rise to 3.75%.

NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

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The November jobs report, which included a negative reading on wages and labor-force participation, was strong enough to solidify a rate hike on December 14TH .

Influencing the latest odds include readings on Inflation, GDP, Housing, Corporate Profits, Manufacturing, Consumer Confidence and Retail Sales.

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Current Odds

  • Current odds the U.S. Prime Rate will rise to 3.75% at the December 14TH, 2016 FOMC monetary policy meeting: 97.2% (extremely likely), with remaining odds -- 2.8% (very unlikely) -- that short-term rates, including the U.S. Prime Rate, will remain at current levels.

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The odds associated with fed fund futures contracts -- widely accepted as the best predictor of what the FOMC will do with the benchmark Fed Funds Target Rate -- are constantly changing, so stay tuned for the latest odds.
 

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Monday, November 21, 2016

Odds At 95.4% (Extremely Likely) The U.S. Prime Rate Will Rise To 3.75% At The December 14, 2016 FOMC Monetary Policy Meeting

Prime Rate Forecast
Prime Rate Forecast
Latest Prime Rate Forecast

As of right now, the investors who trade in fed fund futures have odds at 95.4% (as implied by current pricing on contracts) that the Federal Open Market Committee (FOMC) will vote raise the target range for the benchmark fed funds rate by 25 basis points (0.25 percentage point), to 0.5% - 0.75%, at the December 14TH, 2016 monetary policy meeting (extremely likely.)

The current United States Prime Rate, which went into effect on December 17, 2015, is 3.5%.  A 25 basis point rate hike on December 14TH would cause the U.S. Prime Rate to rise to 3.75%.

NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

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Recent and key readings on inflation, housing, jobs and retail sales had strong influence on the latest odds.

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The yield on the 10-Year U.S. Treasury Note has been on the rise, so mortgage rates will rise too.

Here's a recent history on the 10-year yield:

  • November 08, 2016: 1.88%
  • November 09, 2016: 2.07% 
  • November 10, 2016: 2.15% 
  • November 14, 2016: 2.23% 
  • November 15, 2016: 2.23% 
  • November 16, 2016: 2.22% 
  • November 17, 2016: 2.29% 
  • November 18, 2016: 2.34%  
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Equities continue to soar to new, record-highs.  The Dow Jones Industrial Average (DJIA) closed at 18,956.69 today, while the broader Standard and Poor's 500 Index topped its history at 2,198.18. The NASDAQ Composite closed at 5,368.86.

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Current Odds

  • Current odds the U.S. Prime Rate will rise to 3.75% at the December 14TH, 2016 FOMC monetary policy meeting: 95.4% (extremely likely), with remaining odds -- 4.6% (very unlikely) -- that short-term rates, including the U.S. Prime Rate, will remain at current levels.

    ==========

The odds associated with fed fund futures contracts -- widely accepted as the best predictor of what the FOMC will do with the benchmark Fed Funds Target Rate -- are constantly changing, so stay tuned for the latest odds.

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Wednesday, November 09, 2016

Odds At 81.1% (Likely) The U.S. Prime Rate Will Rise To 3.75% At The December 14, 2016 FOMC Monetary Policy Meeting

Prime Rate Forecast
Prime Rate Forecast
Latest Prime Rate Forecast

As of right now, the investors who trade in fed fund futures have odds at 81.1% (as implied by current pricing on contracts) that the Federal Open Market Committee (FOMC) will vote raise the target range for the benchmark fed funds rate by 25 basis points (0.25 percentage point), to 0.5% - 0.75%, at the December 14TH, 2016 monetary policy meeting (likely.)

The current United States Prime Rate, which went into effect on December 17, 2015, is 3.5%.  A 25 basis point rate hike on December 14TH would cause the U.S. Prime Rate to rise to 3.75%

NB: U.S. Prime Rate = (The Fed Funds Target Rate + 3)

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Many were betting that markets would react negatively to a Donald Trump victory over Hillary Clinton in the race for the White House.

But today, equities closed with gains, and key treasuries notes were sold, indicating confidence in the future of the U.S. economy.

The Standard and Poor's 500 Index added 23.70 points (+1.108%) to close at 2,163.26, while the Dow Jones Industrial Average (DJIA) gained 256.95 points (+1.402%) to close at 18,589.69.  The NASDAQ Composite Index rose by 57.58 points (+1.109%) to close at 5,251.07.

The yield on the 10-Year U.S. Treasury Note ended at 2.07% today, a yield not seen since January 22.

With no significant bearish drama in markets today, traders are still betting the Fed is on track to raise short-term rates next month.

Stay tuned...

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Current Odds

  • Current odds the U.S. Prime Rate will rise to 3.75% at the December 14TH, 2016 FOMC monetary policy meeting: 81.1% (likely), with remaining odds -- 18.9% (unlikely) -- that short-term rates, including the U.S. Prime Rate, will remain at current levels.

    ==========

The odds associated with fed fund futures contracts -- widely accepted as the best predictor of what the FOMC will do with the benchmark Fed Funds Target Rate -- are constantly changing, so stay tuned for the latest odds.

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