Prime Rate

also known as the Fed, National or United States Prime Rate,
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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

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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)

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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.

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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.

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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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