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80% probability of Fed rate hike in March 2018

Implied probabilities of Fed rate hikes for 2018 according to the CME Fedwatch Tool. Day after January FOMC (last night), probability of a hike in March is 80.3%.

Based on this table:

  1. Odds of a 25 basis point hike during March FOMC meeting is 80.3%.
  2. A rate cut cannot be ruled out at any time.
  3. If there is a rate hike in March, the next one will likely happen in June with 58.9% probability.
  4. A third hike in 2018 is uncertain; probability of cumulative 75 basis point hike for the whole year is less than 50% at this point.
CME Fedwatch Tool rate hike odds captured on 01 February 2018

CME Fedwatch Tool screenshot taken on 01 February 2018 | Source: CME Fedwatch


This screengrab was captured on 14 December 2017, day after December FOMC. Odds of a March hike at that time was just over 45%. This was what I wrote at that time.

CME FedWatch Tool screenshot taken on 14 Dec 2017

CME FedWatch Tool screenshot taken on 14 Dec 2017


Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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