About RateProbability

RateProbability is a tool for traders, investors, and macroeconomic enthusiasts who want a clearer view of how markets are pricing future central bank policy decisions.

Mission

The mission of RateProbability is to provide professional-quality market tools for retail investors who typically do not have access to the same tools as professionals. It provides a clear data table and a visual tool for analyzing expected central bank decisions. This is relevant because these decisions can influence rates, currency, commodity, and stock markets. Sophisticated retail traders and investors deserve access to robust informational tools, but many cannot justify the cost of a professional service; this site aims to narrow that gap.

What RateProbability Does

The tool uses publicly-available data from central banks and the views of market participants to chart an implied path of the policy rates set by central banks. The tool began with a limited scope but is expanding to cover more central banks.

Who Built This

RateProbability was created by a hobby developer with a background in economics and both professional and personal trading experience. They found that there are many useful tools not available to retail traders and began learning web development to create tools for their own use – and to share with others. Their trading focus is discretionary macro, with an emphasis on rates and foreign exchange.

What Makes It Different

RateProbability is a unique tool because it extends a year into the future and provides multiple central banks’ implied rate paths in one easy-to-read interface.

How to Use It and Its Limits

RateProbability is an informational tool to gauge what is currently consensus for the future path of central bank policy rates, and how that consensus has changed in recent weeks and months. It is not meant as investment advice or as a forecast or trading signal. The tool only accounts for scheduled rate decisions and does not anticipate intra-meeting decisions. Expected rate paths can change with the release of economic data, central bank official commentary, and financial conditions. Expectations may be proven either correct or incorrect as rate decisions are released. Users should combine the tool with their own research and judgement.

Data, Methodology, and Updates

Expectations output is computed frequently throughout the trading day (New York session) and is timely but not “live”. The underlying methodology employs a chained day-weighted calculation that combines data from central bank websites, FRED, financial derivatives such as interest rate swaps, and more. The exact calculation differs by central bank due to discrepancies in available data, but the output is intended to be interpreted the same way across banks. Given the current update frequency, shifts in expectations are best analyzed with a time horizon of a day or longer.

Contact

Questions or suggestions? Contact us at [email protected].