Prime Rate

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

Friday, February 03, 2017

Odds At 91.1% (Likely) The U.S. Prime Rate Will Remain At 3.75% After The March 15, 2017 Monetary Policy Meeting

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As of right now, the investors who trade in fed fund futures have odds at 91.1% (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 March 15TH, 2017 monetary policy meeting (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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From today's January jobs report:

  • At 227,000, nonfarm payrolls advanced faster than expected.
  • At 2,242,000, the 2016, yearly job gains were better than the Labor Department's original reading.
  • The civilian labor force participation rate rose from 62.7% to 62.9%.
But, countering the positive:

  • The U-3 (headline) unemployment rate edged up from 4.7 to 4.8%, while the U-6 jobless rate rose from 9.2% to 9.4%.
  • For January, and significantly, average hourly earnings for all nonfarm, private employees rose by a disappointing 0.1155%, while the year-on-year hourly figure declined from 2.9% to 2.5%.

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With some influence on the latest odds: January experienced a very modest retreat for the services sector.

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Stay tuned for the latest odds...

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Current Odds

  • Current odds the U.S. Prime Rate will remain at the current 3.75% after the March 15TH, 2017 FOMC monetary policy meeting: 91.1%  (likely), with remaining odds --  8.9% -- 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 3RD, 2017 FOMC monetary policy meeting: 69.7%  with remaining odds --  30.3% -- 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 June 14TH, 2017 FOMC monetary policy meeting: 34.3%  with remaining odds --  65.7% (somewhat likely) -- that short-term rates will be at least 25 basis points (0.25 percentage point) higher.


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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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