Current Odds On Prime Rate Increase for the December 16, 2015 FOMC Monetary Policy Meeting At 43% (Somewhat Likely)

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 43% (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 December 16^TH, 2015 monetary policy meeting (somewhat likely.)

Here's a key snippet from today's FOMC statement, words which the Committee is likely to include again in the December 16^TH post-meeting release:

"...The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run..."

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Current Odds

• Current odds that the Prime Rate (currently 3.25%) will rise by at least 25 basis points at the December 16^TH, 2016 FOMC monetary policy meeting: 43% (somewhat likely.)
  
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• Current odds that the Prime Rate (currently 3.25%) will rise by at least 25 basis points at the January 27^TH, 2016 FOMC monetary policy meeting: 52% (somewhat likely.)
  
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• Current odds that the Prime Rate (currently 3.25%) will rise by at least 25 basis points at the March 16^TH, 2016 FOMC monetary policy meeting: 67% (somewhat likely.)
  
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• Current odds that the Prime Rate (currently 3.25%) will rise by at least 25 basis points at the April 27^TH, 2016 FOMC monetary policy meeting: 72% (somewhat likely.)
  
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• Current odds that the Prime Rate (currently 3.25%) will rise by at least 25 basis points at the June 15^TH, 2016 FOMC monetary policy meeting: 80% (likely.)
  
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• Current odds that the Prime Rate (currently 3.25%) will rise by at least 25 basis points at the July 27^TH, 2016 FOMC monetary policy meeting: 83% (likely.)
  
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• Current odds that the Prime Rate (currently 3.25%) will rise by at least 25 basis points at the September 21^ST, 2016 FOMC monetary policy meeting: 88% (likely.)
  
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• Current odds that the Prime Rate (currently 3.25%) will rise by at least 25 basis points at the November  2^ND, 2016 FOMC monetary policy meeting: 91% (very 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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