United States Prime Rate

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

Thursday, December 15, 2016

Odds At 96% (Extremely Likely) The U.S. Prime Rate Will Remain At 3.75% After The February 1, 2017 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 96% (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 0.5% - 0.75% at the February 1ST, 2017 monetary policy meeting (extremely likely.)

The current Prime Rate, which went into effect on December 15, 2016, is 3.75%.

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

=======================


The Trump Effect still has capital moving out of the safety of American government debt, which is driving up yields.  The yield on the Ten-Year U.S. Treasury Note continues to surge higher, which, in turn, will cause mortgage rates to rise.

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

  • December 7, 2016: 2.34%
  • December 8, 2016: 2.40%
  • December 9, 2016: 2.47% 
  • December 12, 2016: 2.49% 
  • December 13, 2016: 2.48% 
  • December 14, 2016: 2.54%
  • December 15, 2016: 2.60%

Let's hope all the Wall Street enthusiasm about Mr. Trump's rise to the White House is well placed.

=======================

Influencing the latest odds include readings on Inflation, Retail Sales, Jobs and Industrial Production.

=======================

Current Odds

  • Current odds the U.S. Prime Rate will remain at the current 3.75% after the February 1ST, 2017 FOMC monetary policy meeting: 96% (extremely likely), with remaining odds -- 4% (extremely unlikely) -- that the FOMC will opt to raise short-term rates by 25 basis points (0.25 percentage point.)

    ==========
  • Current odds the U.S. Prime Rate will remain at the current 3.75% after the March 15TH, 2017 FOMC monetary policy meeting: 74.7%  (somewhat likely), with remaining odds --  25.3% -- that short-term rates will be at least 25 basis points (0.25 percentage point) higher.

     ==========
  • Current odds the U.S. Prime Rate will remain at the current 3.75% after the May 3RD, 2017 FOMC monetary policy meeting: 60.4%  with remaining odds --  39.6% -- that short-term rates will be at least 25 basis points (0.25 percentage point) higher.


    ========== 

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.

Labels: , , , , , , ,

--> www.FedPrimeRate.com Privacy Policy <--

>  SITEMAP  <

Wednesday, December 14, 2016

United States Prime Rate Rises to 3.75%

U.S. Prime Rate Is Now 3.75%
The Federal Open Market Committee (FOMC) of the Federal Reserve has just adjourned its eighth and final monetary policy meeting of 2016 and, in accordance with our latest forecast, has voted to raise the benchmark target range for the federal funds rate from 0% - 0.25% to 0.5% - 0.75%.  Therefore, the United States Prime Rate (a.k.a the Fed or national Prime Rate) is 3.75%, effective tomorrow.

======

American banks have already started to announce that their Prime Lending Rate is now 3.75%, including:

============

Here's a clip from today's FOMC press release (note text in bold):

"...Information received since the Federal Open Market Committee met in November indicates that the labor market has continued to strengthen and that economic activity has been expanding at a moderate pace since mid-year. Job gains have been solid in recent months and the unemployment rate has declined. Household spending has been rising moderately but business fixed investment has remained soft. Inflation has increased since earlier this year but is still below the Committee's 2 percent longer-run objective, partly reflecting earlier declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation have moved up considerably but still are low; most survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with gradual adjustments in the stance of monetary policy, economic activity will expand at a moderate pace and labor market conditions will strengthen somewhat further. Inflation is expected to rise to 2 percent over the medium term as the transitory effects of past declines in energy and import prices dissipate and the labor market strengthens further. Near-term risks to the economic outlook appear roughly balanced. The Committee continues to closely monitor inflation indicators and global economic and financial developments.

In view of realized and expected labor market conditions and inflation, the Committee decided to raise the target range for the federal funds rate to 1/2 to 3/4 percent. The stance of monetary policy remains accommodative, thereby supporting some further strengthening in labor market conditions and a return to 2 percent inflation.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. In light of the current shortfall of inflation from 2 percent, the Committee will carefully monitor actual and expected progress toward its inflation goal. The Committee expects that economic conditions will evolve in a manner that will warrant only gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run. However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data.

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; James Bullard; Stanley Fischer; Esther L. George; Loretta J. Mester; Jerome H. Powell; Eric Rosengren; and Daniel K. Tarullo..."
==========

Labels: , , , , , , , , ,

--> www.FedPrimeRate.com Privacy Policy <--

>  SITEMAP  <

Tuesday, December 13, 2016

Odds At 95.4% (Extremely Likely) The U.S. Prime Rate Will Rise To 3.75% At Tomorrow's 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 tomorrow's 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 tomorrow would cause the U.S. Prime Rate to rise to 3.75%.

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

=======================

The 3 major stock-market indices closed with record highs again today, with the Dow Jones Industrial Average (DJIA) creeping closer to 20,000.

  • The DJIA gained 114.78 points (0.58%) to close at 19,911.21 (CHART)
  • The broader S and P 500 Index added 14.76 points (0.654%) to close at 2,271.72 (CHART)
  • The NASDAQ Composite advanced by 51.29 points (0.948%) to close at 5,463.83 (CHART)

Stay tuned for tomorrow press release from The Fed, and reports on retail sales and industrial production.

=======================

Current Odds

  • Current odds the U.S. Prime Rate will rise to 3.75% at tomorrow's 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.

Labels: , , , , , , ,

--> www.FedPrimeRate.com Privacy Policy <--

>  SITEMAP  <

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)

=======================

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.

=======================

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.

    ==========

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.
 

Labels: , , , , , , ,

--> www.FedPrimeRate.com Privacy Policy <--

>  SITEMAP  <


bing

bing

FedPrimeRate.com
Entire Website © 2024 FedPrimeRate.comSM


This website is neither affiliated nor associated with The United States Federal Reserve
in any way. Information in this website is provided for educational purposes only. The owners
of this website make no warranties with respect to any and all content contained within this
website. Consult a financial professional before making important decisions related to any
investment or loan product, including, but not limited to, business loans, personal loans,
education loans, first or second mortgages, credit cards, car loans or any type of insurance.