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

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 1^ST, 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)

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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.

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

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Current Odds

• Current odds the U.S. Prime Rate will remain at the current 3.75% after the February 1^ST, 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.)
  
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• Current odds the U.S. Prime Rate will remain at the current 3.75% after the March 15^TH, 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.
  
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• Current odds the U.S. Prime Rate will remain at the current 3.75% after the May 3^RD, 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.
  
  
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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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