Current Odds On Prime Rate Increase for the October 28, 2015 FOMC Monetary Policy Meeting At 5% (Very Unlikely)

Prime Rate Forecast - Predictions

Latest Prime Rate Forecast

As of right now, the investors who trade in fed funds futures at the CME Group have odds at 5% (as implied by current pricing on contracts) that the Federal Open Market Committee (FOMC) will vote to raise the benchmark Federal Funds Target Rate by at least 25 basis points (0.25 percentage point) at the October 28^TH, 2015 monetary policy meeting (very unlikely.)

This morning's jobs report was weaker than most economists expected.  142,000 workers were added to nonfarm payrolls last month, with both July and August jobs figures revised to the negative. According to the Labor Department, wages were stagnant during September, while the civilian labor force participation rate waned from 62.6% to 62.4%, a low not seen since Star Wars dominated movie theaters.

September's employment and wage readings caused a major shift in fed funds futures, with the odds now predicting that the Fed will leave short-term rates at zero deep into 2016.

Current Odds

• Current odds that the Prime Rate will rise by at least 25 basis points at the December 16^TH, 2015 FOMC monetary policy meeting: 30% (not likely.)
  
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• Current odds that the Prime Rate will rise by at least 25 basis points at the January 27^TH, 2016 FOMC monetary policy meeting: 40% (not likely.)
  
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• Current odds that the Prime Rate will rise by at least 25 basis points at the March 16^TH, 2016 FOMC monetary policy meeting: 52% (somewhat likely.)
  
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• Current odds that the Prime Rate will rise by at least 25 basis points at the April 27^TH, 2016 FOMC monetary policy meeting: 56% (somewhat likely.)
  
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• Current odds that the Prime Rate will rise by at least 25 basis points at the June 15^TH, 2016 FOMC monetary policy meeting: 66% (somewhat likely.)
  
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• Current odds that the Prime Rate will rise by at least 25 basis points at the July 27^TH, 2016 FOMC monetary policy meeting: 73% (somewhat likely.)
  
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  Current odds that the Prime Rate will rise by at least 25 basis points at the September 21^ST, 2016 FOMC monetary policy meeting: 78% (somewhat likely.)
  
  
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• NB: US Prime Rate = (The Fed Funds Target Rate + 3)

The odds related to federal-funds futures contracts -- widely accepted as the best predictor of where the FOMC will take the benchmark Fed Funds Target Rate -- are constantly changing, so stay tuned for the latest odds.

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