At the Federal Open Market Committee's last meeting in March, participants' federal funds rate projections ranged from 4.9% to 5.9% this year with the median at 5.1%. The FOMC currently targets the fed funds rate at 4.75% to 5%, and the dot-plot graph indicated many members don't see the need to raise rates much higher.
It projected cutting short-term interest rates in 2024 and 2025.
The CME Group's FedWatch Tool shows a 96.5% probability that the Fed will raise interest rates by a quarter of a point to a range of 5% to 5.25% at its meeting that concludes Wednesday. On Monday, the market placed the odds of the 25-basis-point hike at a 92.2%.
The FedWatch Tool shows nearly a 65% probability of keeping rates at 5% to 5.25% at the FOMC's June meeting, assuming a quarter-point increase in May. That's down from Monday's 67.1%. The market has placed a 31.3% chance that rates will increase to 5.25% to 5.5%.
