Odds At 100% (Certain) The United States Prime Rate Will Hold At 4.75% After The December 11, 2019 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 100% the Federal Open Market Committee (FOMC) will vote to maintain the target range for the benchmark fed funds rate at the current 1.50% - 1.75% at the December 11^TH, 2019 monetary policy meeting (certain), and keep the United States Prime Rate at 4.75%.

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The current U.S. Prime Rate was lowered from 5.00% to 4.75% on October 30^TH, 2019.

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

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Manufacturing: The PMI® for October 2019 came in at 48.3%.  While this was an improvement over the September figure, it still indicates contraction. This makes three consecutive months of a below-50 reading:

• October 2019: 48.3%
  
• September 2019: 47.8%
  
• August 2019: 49.1%

For the PMI, any figure below 50% indicates contraction.

 
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Stay tuned for the latest odds, and for current U.S. economic data (inflation, jobs, economic growth, wages, etc.) 

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Current Odds

• Current odds the United States Prime Rate will hold at 4.75% after the December 11^TH, 2019 FOMC monetary policy meeting: 100% (certain.)
  
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• NB: United States Prime Rate = (The Fed Funds Target Rate + 3)

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Odds At 90% (Likely) The United States Prime Rate Will Be Cut To 4.75% After The October 30, 2019 FOMC Monetary Policy Meeting

Prime Rate Forecast

Prime Rate Forecast

As of right now, our odds are at 90% the Federal Open Market Committee (FOMC) will vote to cut the target range for the benchmark fed funds rate, from the current 1.75% - 2.00%, to  1.50% - 1.75% at the October 30^TH, 2019 monetary policy meeting (likely.)

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The current U.S. Prime Rate, which went into effect on September 19^TH, 2019, is 5.00%.

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

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Although the headline (U-3) unemployment rate fell to 3.5% last month, a 50-year low, there were two key negatives in the September jobs report:

• Average Hourly Earnings were at $28.09 last month; the month-on-month change was -$0.01 (-0.036%.)
• Average Weekly Earnings were at $966.30 last month; the month-to-month change was -$0.34 (-0.035%.)

Adding to economic worries: for two months in a row, the manufacturing sector contracted, according to the Institute for Supply Management® (ISM®.)  The Purchasing Manager's Index (PMI®) for August 2019 was 49.1%, while the September reading was 47.8%.  For the PMI, any figure below 50% implies contraction.

And then there's the trade war...

 
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Stay tuned for the latest odds, and for current U.S. economic data (inflation, jobs, economic growth, wages, etc.) 

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Current Odds

• Current odds the United States Prime Rate will be cut to 4.75% after the October 30^TH, 2019 FOMC monetary policy meeting: 90% (likely.)
  
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• NB: United States Prime Rate = (The Fed Funds Target Rate + 3)

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Odds At 100% (Certain) The United States Prime Rate Will Be Cut To 5.00% After The September 18, 2019 FOMC Monetary Policy Meeting

Prime Rate Forecast

Prime Rate Forecast

As of right now, our odds are at 100% the Federal Open Market Committee (FOMC) will vote to lower the target range for the benchmark fed funds rate from 2.00% - 2.25% to 1.75% - 2.00% at the September 18^TH, 2019 monetary policy meeting (certain.)

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The current U.S. Prime Rate, which went into effect on July 31^ST, 2019, is 5.25%.

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

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Judging by recent moves by investors, a global recession is in the offing.

On Thursday, August 15, 2019, the yield on the 30-year U.S. Treasury bond closed below 2% for the first time ever, ending the day at 1.98%. 

Another ominous sign: many economic indicators are often at their strongest, as they are now, before an economic downturn.

 
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Stay tuned for the latest odds, and for current U.S. economic data (inflation, jobs, economic growth, wages, etc.) 

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U.S. Treasury Yield Curve for Thursday, August 15, 2019

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Current Odds

• Current odds the United States Prime Rate will be cut to 5.00% after the September 18^TH, 2019 FOMC monetary policy meeting: 100% (certain.)
  
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• NB: United States Prime Rate = (The Fed Funds Target Rate + 3)

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