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FOMC: zero percent chance of a hike - UOB

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 25, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Guatemala) - Analysts at UOB Group explained that for the January 2016 Fed Reserve FOMC, the consensus market expectation (including us) is for no rate hike announcement out from the Fed in January.

    Key Quotes:

    "The January FOMC is without any updated Summary of Economic Projections or scheduled press conference by Janet Yellen (decision due on 28 January, 3am Singapore time) and that probably reinforced the expectations for the Fed to stay on pause especially with the current state of the US & global financial markets and more importantly, the weakness & volatility in oil prices.

    Based on trading in futures and options data compiled by Bloomberg, the probability of another Fed rate hike in January 2016 remained at 0% (as of 22 Jan 2016) while the odds of another 25bps increase in March was at 26.3% (as of 22 Jan), up from 22.1% (on 21 Jan) but still markedly lower from 40% (on 8 Jan). Previously, it was around 50% on 7 Jan."
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