Odds Now At 95% (Very Likely) The U.S. Prime Rate Will Continue at 7.50% After the March 19, 2025 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 95% (very likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to leave the benchmark target range for the fed funds rate (TRFFR) at 4.25% - 4.50% at the March 19^TH, 2025 monetary policy meeting, leaving the U.S. Prime Rate at the current 7.50%.

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Consumer Price Index (CPI) at 3.00% Last Month (Y-o-Y).

And, year-on-year, the Core CPI reading for January, 2025 was 3.26%!

So, why is inflation becoming a problem again?

Tariffs? Not likely.  Not yet anyway.

• The likely culprit = the supply of money in the American economy: M2.

Here's a chart from 2015 thru the end of 2024...👇

CHART: www.FedPrimeRate.com
 Monthly M2 Money Supply
 2015 thru 2024

Here is how the Fed defines M2 Money:

 

"...Beginning May 2020, M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000) less IRA and Keogh balances at depository institutions; and (2) balances in retail money-market funds (MMFs) less IRA and Keogh balances at MMFs.

Seasonally adjusted M2 is constructed by summing savings deposits (before May 2020), small-denomination time deposits, and retail MMFs, each seasonally adjusted separately, and adding this result to seasonally adjusted M1..."

Stay tuned...

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The United States Prime Rate was lowered to the current 7.50% on December 18, 2024.

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SUMMARY

• Current odds the U.S. Prime Rate will hold at the current 7.50% after the March 19^TH, 2025 FOMC monetary policy meeting: 95% (very likely.)

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