Prime Rate

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

Friday, October 07, 2016

Odds At 91.7% (Very Likely) The U.S. Prime Rate Will Remain At 3.5% After The November 2, 2016 FOMC Monetary Policy Meeting

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Latest Prime Rate Forecast

As of right now, the investors who trade in fed fund futures via the CME Group have odds at 91.7% (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 November 2ND, 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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This morning's lackluster jobs report for September has traders betting the Fed will leave short-term rates on hold at next month's monetary policy meeting (November 2), and perhaps raise rates at the last policy meeting of 2016 (December 14.)

Recent economic data include readings on inflation, consumer confidencehousing, manufacturing, construction, and the services sector.

Still plenty of data between now and November 2, so stay tuned for the latest odds...

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Current Odds
  • Current odds the Prime Rate will continue at 3.5% after the November 2ND, 2016 FOMC monetary policy meeting: 91.7% (very likely) with odds at 8.3%  for a 25 basis point (0.25 percentage point) rate increase.

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  • Current odds the Prime Rate will continue at 3.5% after the December 14TH, 2016 FOMC monetary policy meeting: 30.5% (somewhat unlikely), with remaining odds -- 69.5% (somewhat likely) -- for a rate increase between now and December 14TH.

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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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