Central Banks

The FOMC meeting is today

The FOMC meeting at 2 pm ET today is a placeholder. There are no legitimate expectations for a rate hike and the statement hardly needs to be tweaked to tee-up a hike in June, which is widely expected.

Here’s what’s priced in:

  • Hike today 4.6% chance
  • Hike on June 13 – 92.5%
  • Second hike in August 8.5%
  • Second hike in Sept 61%
  • Third hike in December 39%

The real mystery is the September meeting. A hike then is a 61% likelihood, according to Fed funds futures.

Will we get a signal on that front today? It’s possible. One way the Fed could do that is to brush off a temporary rise in inflation that will peak around June. More likely is that the Fed puts the emphasis on data and will tweak expectations as the numbers roll in.

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