United States Prime Rate

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

Thursday, September 24, 2020

Odds At 100% (Certain) The United States Prime Rate Will Hold At 3.25% After The November 5, 2020 FOMC Monetary Policy Meeting

United States Prime Rate Forecast
Prime Rate Prediction
Prime Rate Forecast

As of right now, our odds are at 100% (certain) the Federal Open Market Committee (FOMC) will vote to leave the target range for the benchmark fed funds rate at the current 0.00% - 0.25% at the November 5TH, 2020 monetary policy meeting, and keep the United States Prime Rate (a.k.a Fed Prime Rate) at 3.25%.

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The current U.S. Prime Rate was lowered from 4.25% to the current 3.25% on March 15TH, 2020.

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 The COVID-19 pandemic is showing no signs of abating in the USA, and abroad. Many economies continue to suffer.
 
But in America, the housing sector keeps roaring. Mortgage rates are at record lows, and home prices keep pushing up to new record highs.

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Coronavirus COVID-19 Reminder:

Symptoms of COVID-19, which may appear 2-14 days after exposure, include:
  • Fever
  • Cough
  • Shortness of breath
Emergency warning signs for COVID-19 include:
  • Difficulty breathing or shortness of breath
  • Persistent pain or pressure in the chest
  • New confusion or inability to arouse
  • Bluish lips or face

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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 remain at the current 3.25% after the November 5TH, 2020 FOMC monetary policy meeting: 100% (certain.)

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Thursday, August 20, 2020

Odds At 100% (Certain) The United States Prime Rate Will Hold At 3.25% After The September 16, 2020 FOMC Monetary Policy Meeting

United States Prime Rate Forecast
Prime Rate Prediction
Prime Rate Forecast

As of right now, our odds are at 100% (certain) the Federal Open Market Committee (FOMC) will vote to leave the target range for the benchmark fed funds rate at the current 0.00% - 0.25% at the September 16TH, 2020 monetary policy meeting, and keep the United States Prime Rate (a.k.a Fed Prime Rate) at 3.25%.

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The current U.S. Prime Rate was lowered from 4.25% to the current 3.25% on March 15TH, 2020.

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The Labor Department reported that new claims for jobless benefits increased from 971,000 for the week that ended on August 8TH, to 1,106,000 for the week that ended on August 15TH. Most professional prognosticators were expecting a decrease.

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Gross Domestic Product (GDP) for the United States declined by a staggering 32.9% between April and June of this year, according to the Commerce Department's first estimate.

There will be two more readings on Q2 GDP in the coming months.


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Coronavirus COVID-19 Reminder:

Symptoms of COVID-19, which may appear 2-14 days after exposure, include:
  • Fever
  • Cough
  • Shortness of breath
Emergency warning signs for COVID-19 include:
  • Difficulty breathing or shortness of breath
  • Persistent pain or pressure in the chest
  • New confusion or inability to arouse
  • Bluish lips or face

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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 remain at the current 3.25% after the September 16TH, 2020 FOMC monetary policy meeting: 100% (certain.)

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Friday, June 12, 2020

Odds At 100% (Certain) The United States Prime Rate Will Hold At 3.25% After The July 29, 2020 FOMC Monetary Policy Meeting

United States Prime Rate Forecast
Prime Rate Prediction
Prime Rate Forecast

As of right now, our odds are at 100% (certain) the Federal Open Market Committee (FOMC) will vote to leave the target range for the benchmark fed funds rate at the current 0.00% - 0.25% at the July 29TH, 2020 monetary policy meeting, and keep the United States Prime Rate (a.k.a Fed Prime Rate) at 3.25%.

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The current U.S. Prime Rate was lowered from 4.25% to the current 3.25% on March 15TH, 2020.

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The Labor Department reported that initial claims for unemployment benefits declined from 1,897,000 for the week that ended on May 30TH, to 1,542,000 for the week that ended on June 6TH.  Encouraging news for sure.

But the COVID-19 crisis is still very much with us. Yesterday, in the United States, there were 20,486 new cases, and 834 new deaths.

So the Fed isn't going to do anything with short-term rates any time soon, and is probably going to be on hold into 2022 (only two FOMC members see the Fed raising rates at some point during 2022; see dot plot below.)

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CHART: Initial Claims for Unemployment Insurance - June 6, 2020 Update
CHART: Initial Claims for Unemployment Insurance
June 6, 2020 Update
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CHART: FOMC Dot Plot - June 10, 2020
CHART: FOMC Dot Plot - June 10, 2020
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Coronavirus COVID-19 Reminder:

Symptoms of COVID-19, which may appear 2-14 days after exposure, include:
  • Fever
  • Cough
  • Shortness of breath
Emergency warning signs for COVID-19 include:
  • Difficulty breathing or shortness of breath
  • Persistent pain or pressure in the chest
  • New confusion or inability to arouse
  • Bluish lips or face

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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 remain at the current 3.25% after the July 29TH, 2020 FOMC monetary policy meeting: 100% (certain.)

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Friday, May 15, 2020

Odds At 100% (Certain) The United States Prime Rate Will Continue At 3.25% After The June 10, 2020 FOMC Monetary Policy Meeting

United States Prime Rate Forecast
Prime Rate Prediction
Prime Rate Forecast

As of right now, our odds are at 100% (certain) the Federal Open Market Committee (FOMC) will vote to leave the target range for the benchmark fed funds rate at the current 0.00% - 0.25% at the June 10TH, 2020 monetary policy meeting, and keep the United States Prime Rate (a.k.a Fed Prime Rate) at 3.25%.

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The current U.S. Prime Rate was lowered from 4.25% to the current 3.25% on March 15TH, 2020.

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According to the Labor Department, the unemployment rate in the USA jumped from 4.4% in March, to 14.7% in April, with a loss of an estimated 20,500,000 jobs.


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Coronavirus COVID-19 Reminder:

Symptoms of COVID-19, which may appear 2-14 days after exposure, include:
  • Fever
  • Cough
  • Shortness of breath
Emergency warning signs for COVID-19 include:
  • Difficulty breathing or shortness of breath
  • Persistent pain or pressure in the chest
  • New confusion or inability to arouse
  • Bluish lips or face

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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 continue at the current 3.25% after the June 10TH, 2020 FOMC monetary policy meeting: 100% (certain.)

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Saturday, March 21, 2020

Odds At 100% (Certain) The United States Prime Rate Will Continue At 3.25% After The April 29, 2020 FOMC Monetary Policy Meeting

United States Prime Rate Forecast
Prime Rate Prediction
Prime Rate Forecast

As of right now, our odds are at 100% (certain) the Federal Open Market Committee (FOMC) will vote to leave the target range for the benchmark fed funds rate at the current 0.00% - 0.25% at the April 29TH, 2020 monetary policy meeting, and keep the United States Prime Rate (a.k.a Fed Prime Rate) at 3.25%.

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The current U.S. Prime Rate was lowered from 4.25% to the current 3.25% on March 15TH, 2020.

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Coronavirus COVID-19 Reminder:

Symptoms of COVID-19, which may appear 2-14 days after exposure, include:
  • Fever
  • Cough
  • Shortness of breath
Emergency warning signs for COVID-19 include:
  • Difficulty breathing or shortness of breath
  • Persistent pain or pressure in the chest
  • New confusion or inability to arouse
  • Bluish lips or face

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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 continue at the current 3.25% after the April 29TH, 2020 FOMC monetary policy meeting: 100% (certain.)

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Saturday, March 14, 2020

Odds At 95% (Very Likely) The United States Prime Rate Will Be Cut To 3.25% At The March 18, 2020 FOMC Monetary Policy Meeting

United States Prime Rate Forecast
Prime Rate Prediction
Prime Rate Forecast

At the March 18, 2020 FOMC monetary policy meeting, and in response to the continuing and global Novel COVID-19 coronavirus emergency, we believe the Fed will take the rare and extraordinary step of cutting its key benchmark interest rate --  the target range for the benchmark fed funds rate -- by 100 basis points, to a target range of 0% - 0.25%.  This cut would cause the United States Prime Rate (a.k.a the Fed Prime Rate) to be lowered to 3.25%. We put current odds on this happening at 95%.


FYI, and from the CDC website, symptoms of COVID-19, which may appear 2-14 days after exposure, include:
  • Fever
  • Cough
  • Shortness of breath
Emergency warning signs for COVID-19 include:
  • Difficulty breathing or shortness of breath
  • Persistent pain or pressure in the chest
  • New confusion or inability to arouse
  • Bluish lips or face

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The current U.S. Prime Rate was lowered from 4.75% to 4.25% on March 3RD, 2020.

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

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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 3.25% at the March 18TH, 2020 FOMC monetary policy meeting: 95% (very likely.)

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Wednesday, February 05, 2020

Odds At 90% (Likely) The United States Prime Rate Will Continue At 4.75% After The March 18, 2020 FOMC Monetary Policy Meeting

United States Prime Rate Prediction
Prime Rate Prediction
Prime Rate Forecast

As of right now, our odds are at 90% 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 March 18TH, 2020 monetary policy meeting (likely), 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 30TH, 2019.

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

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  • After five consecutive months of contraction for the American manufacturing sector, the Purchasing Manager's Index (PMI®) from the Institute for Supply Management® (ISM®) came in at 50.9% for January 2020, indicating expansion.
  • Inflation, however, remains muted, and below the Federal Reserve's 2% objective. The latest reading on the Core Personal Consumption Expenditures Price Index was 1.6% year-on-year.
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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 March 18TH, 2020 FOMC monetary policy meeting: 90% (likely.)

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Thursday, December 12, 2019

Odds At 100% (Certain) The United States Prime Rate Will Continue At 4.75% After The January 29, 2020 FOMC Monetary Policy Meeting

United States Prime Rate Prediction
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 January 29TH, 2020 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 30TH, 2019.

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

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2020 Rate Forecast: Out of 17 Federal Reserve officials, 4 believe that short-term rates, including the U.S. Prime Rate, will
be raised at some point next year, while 13 are predicting that short-term rates will remain where they are right now.

And here's a clip from yesterday's opening remarks by Chair Jerome Powell:

FOMC 2020 Dot Plot
FOMC 2020 Dot Plot
"...We believe that the current stance of monetary policy will support sustained growth, a strong labor market, and inflation near our symmetric 2 percent objective. As long as incoming information about the economy remains broadly consistent with this outlook, the current stance of monetary policy likely will remain appropriate. Looking ahead, we will be monitoring the effects of our recent policy actions, along with other information bearing on the outlook, as we assess the appropriate path of the target range for the federal funds rate. Of course, if developments emerge that cause a material reassessment of our outlook, we would respond accordingly. Policy is not on a preset course..." 
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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 January 29TH, 2020 FOMC monetary policy meeting: 100% (certain.)

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Monday, November 11, 2019

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

United States Prime Rate Prediction
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 11TH, 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 30TH, 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 11TH, 2019 FOMC monetary policy meeting: 100% (certain.)

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Friday, October 04, 2019

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

United States Prime Rate Forecast
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 30TH, 2019 monetary policy meeting (likely.)

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The current U.S. Prime Rate, which went into effect on September 19TH, 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 30TH, 2019 FOMC monetary policy meeting: 90% (likely.)

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