Odds At 91.1% (Likely) The U.S. Prime Rate Will Remain At 3.75% After The March 15, 2017 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 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 15^TH, 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 15^TH, 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 3^RD, 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 14^TH, 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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• 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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