After the announcement of non-agriculture: the probability of the Federal Reserve raising interest rate by 50BP in March is 64.6%, which is the same as before the data release

According to CME’s “Federal Reserve Observation”, the probability of the Federal Reserve raising interest rates by 25 basis points to 4.75% – 5.00% in March is 35.4%, and the probability of raising interest rates by 50 basis points to 5.00% – 5.25% is 64.6%; By May, the probability of a cumulative interest rate increase of 50 basis points is 28.7%, the probability of a cumulative interest rate increase of 75 basis points is 59.1%, and the probability of a cumulative interest rate increase of 100 basis points is 12.3%. (The same as before the announcement of non-agriculture)

Interpretation of this information:

The message refers to a report from CME regarding the possibility of the Federal Reserve raising interest rates. The report indicates that there is a 35.4% chance of a 25 basis point increase to 4.75% – 5.00% in March, while there is a higher chance of a 50 basis point increase to 5.00% – 5.25% at 64.6%. By May, the probability of a cumulative interest rate increase of 50 basis points is 28.7%, and that of 75 basis points is 59.1%, while the probability of a cumulative interest rate increase of 100 basis points is only 12.3%. This is comparable to the situation before the announcement regarding non-agriculture.

The message suggests that the Federal Reserve may raise the interest rates in the near future based on the probabilities listed in the report. The higher probability of a 50 basis point increase in March implies that the Federal Reserve may see a need to stimulate economic growth by raising interest rates. This could potentially slow down inflationary pressures, control spending, and dampen speculative activity in the market. However, the probabilities of a cumulative interest rate increase of 50 basis points or more by May suggest that the Federal Reserve may take a more cautious approach to avoid rattling the market, which could lead to a sudden drop in bond prices.

The three keywords that summarize the message are “interest rates,” “Federal Reserve,” and “probabilities.” These three keywords are closely associated with the current economic climate and suggest that the Federal Reserve is closely monitoring the market in order to maintain the stability of the economy. The report’s probabilities give us an insight into the Federal Reserve’s approach to policymaking and how it navigates the complex economic landscape. The report shows that raising interest rates is not a decision taken lightly, and that each move is carefully considered. As such, market watchers are advised to keep an eye on the Federal Reserve’s next moves and the effect that they will have on the economy.