Prime Rate

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

Sunday, June 26, 2016

Odds At 92.8% (Very Likely) The U.S. Prime Rate Will Continue At 3.5% After The July 27, 2016 FOMC Monetary Policy Meeting

Prime Rate Forecast / Prediction
Prime Rate Forecast
Latest Prime Rate Forecast

As of right now, the investors who trade in fed fund futures via the CME Group have odds at 92.8% (as implied by current pricing on contracts) that the Federal Open Market Committee (FOMC) will vote leave the target range for the benchmark fed funds rate at 0.25% - 0.5% at the July 27TH, 2016 monetary policy meeting (very likely.)

The current United States Prime Rate, which went into effect on December 17, 2015, is 3.5%.

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

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Brexit
Brexit
The results of United Kingdom referendum on leaving the European shocked many, and shocked financial markets too, causing significant heartburn around the world.

It was close, with 51.9% voting to leave, and 48.1% voting to stay.

The news caused a significant shift in interest-rate futures.  Not only are traders certain that the Fed will not raise short-term rates, including the U.S. Prime Rate, on July 27, but they are now pricing in a 7.2% chance the Fed will cut the Prime Rate back down to 3.25% next month.

Stay tuned for the latest odds...

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Current Odds
  • Current odds that the Prime Rate will continue at 3.5% after the July 27TH, 2016 FOMC monetary policy meeting: 92.8% (very likely.)

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  • Current odds that the Prime Rate will continue at 3.5% after the September 21ST, 2016 FOMC monetary policy meeting: 92.8% (very likely.)

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  • Current odds that the Prime Rate will continue at 3.5% after the November 2ND, 2016 FOMC monetary policy meeting: 91.1% (very likely.)

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  • Current odds that the Prime Rate will continue at 3.5% after the December 14TH, 2016 FOMC monetary policy meeting: 71.0% (somewhat likely), with a 23.2% chance of a rate increase, and a 5.3% chance of a rate cut.

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  • Current odds that the Prime Rate will continue at 3.5% after the February 1ST, 2017 FOMC monetary policy meeting: 69.7% (somewhat likely), with a 24.1% chance of a rate increase, and a 5.2% chance of a rate cut.

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  • NB: United States Prime Rate = (The Fed Funds Target Rate + 3)

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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