High probability of a 25 basis point interest rate hike in March

03/13/2023 03:42 • Metaverse Matters • 100 views

It is reported that according to the CME Federal Reserve, the probability of the Federal Reserve raising interest rates by 25 basis points in March to the range of 4.75% – 5.00% is 96.0%; The probability of raising interest rate by 50 basis points dropped to 0, while the probability observed last time (March 8) was 73.5%.

The probability of the Federal Reserve raising interest rates by 50 basis points in March is reduced to 0

Analysis based on this information:

According to a report by CME Federal Reserve, there is a 96.0% probability that the Federal Reserve will raise interest rates by 25 basis points in March, which would bring the range to 4.75%- 5.00%. This report is based on the analysis of Fed funds futures contracts, which are traded on the Chicago Mercantile Exchange (CME).

A basis point is one-hundredth of a percentage point. The 25 basis point hike means that the interest rate on loans will increase by 0.25%. A decision to increase the interest rates is usually made by the Federal Open Market Committee (FOMC), which meets eight times a year. The next FOMC meeting will be held in March.

According to the report, the probability of a 50 basis point hike has dropped to 0, compared to 73.5% last week. This means that the market is expecting a more moderate increase in interest rates. The drop in the probability of a 50 basis point hike was influenced by a number of factors, such as the recent market turmoil and concerns over global economic growth.

The report by CME Federal Reserve suggests that the market is confident that the US economy is strong enough to withstand a modest hike in interest rates. Inflation and unemployment rates are also stable, which makes a rate hike less risky. The Federal Reserve believes that keeping interest rates low for too long could lead to inflation, therefore, it becomes important to increase the rates to maintain a stable economy.

In conclusion, the CME Federal Reserve report suggests that there is a high probability of a 25 basis point interest rate hike in March. This is good news for people who save money as it increases the value of savings. However, it could be challenging for those who have loans or credit card debts as it increases the cost of borrowing. The Federal Reserve decision to increase interest rates will be watched closely by investors, economists, and financial analysts around the world.

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High probability of a 25 basis point interest rate hike in March

The probability of the Federal Reserve raising interest rates by 50 basis points in March is reduced to 0

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