Nearly 24 hours after FOMC last night, CME Fedwatch Tool is showing collapse in rate hike probability for rest of this year.
We are looking at increase in expectation of Fed rate hikes this year 2019 versus just last week based on CME Fedwatch Tool. Just last week market was looking at virtually no hike and odds of a rate cut but now we are back in 2-hikes territory.
Despite the small numbers involved, Fedwatch tool now indicates possibility of two rate hikes in 2019 and no cut in the first half of the year. This is a hawkish swing from just 7 days ago.
Odds of further Fed hikes in 2019 dinimished to virtually zero based on CME Fedwatch Tool. DXY reinforces this with down trend price action.
Based on CME Fedwatch Tool, market attaches a 96.3% of a 25 point rate hike at the coming June 2018 meeting. Another 25-point hike is highly expected in September but a total of 4 hikes or 100 points by end of year cannot be ruled out
This post looks at DXY analysis from a bullish and bearish angle. It might be confusing but I am merely point out how Dollar bulls and bears could justify their point of view. My unqualified observation: DXY could potentially go much higher. Maybe crazy enough to go back to 100 by end of this year.
4-charts. Dot Plot shows FOMC meeting participants’ assessment of monetary policy. Rate hike odds implied from Fed Fund Futures trading.