FAQ — RateProbability
What does “market-implied” mean?
It means the rate paths are derived from tradable interest-rate instruments. It relies on the assumption that the price in a market represents market participants’ consensus view at any given time. Consensus pricing can be wrong. It is not a forecast.
Why does RateProbability show “probabilities” if it’s not a forecast?
The probabilities are a simplified translation of pricing into a readable “chance of a discrete move” using the step size you select. They’re a summary of pricing, not a prediction. (Example: if the tool shows 25bps of cuts priced by the next meeting and the 25bps step size is selected, the displayed probability value will show a 100% probability of a cut at that meeting. This does not mean that a cut will occur with certainty, only that the market is extremely confident of it.)
What does the Step control do?
Step defines the move size used to translate pricing into a simplified move probability (e.g., 25 bps). Different step sizes can change the displayed probability without changing the underlying implied path. Selected step size also affects the number of hikes or cuts priced in by each meeting.
Why do some probabilities appear in parentheses / why are some values negative?
Parentheses indicate a cut (negative direction) vs a hike. Negative Δ vs current (bps) means pricing implies easing relative to the current reference.
What is “Implied Rate (Post-Meeting)”?
It’s the implied policy/overnight rate level immediately after each scheduled meeting date, derived from pricing over the window between meetings. Central banks typically move in discrete steps (25bps, 50bps, etc.); Odd numbered post-meeting rates do not suggest that banks will actually move in odd increments. Often, markets only partially price-in rate moves, which produces post-meeting rate levels at varying increments.
Fed page: why use EFFR instead of the target band midpoint?
EFFR is an observed overnight rate and can be interpreted as a practical proxy for the policy setting. The site may reference band/midpoint for context while plotting the implied effective level.
ECB page: why focus on the Deposit Facility rate?
The depo rate is the ECB’s primary administered rate so is used as the headline policy reference for the tool’s euro-area path.
BOJ page: what’s the difference between Target O/N Call Rate and TONAR?
TONAR is an observed overnight benchmark. The BOJ’s policy target is an operational objective; TONAR provides market context for where overnight funding actually traded recently, and the OIS used reference TONAR directly.
Why might implied rates move even if a central bank “holds”?
Markets price forward-looking expectations. Communication, data, risk conditions, and term premia can shift implied paths even without an immediate change.
How often does the data update?
Multiple times daily (not live). The frequency may change in the future, but for now the site updates every 2-3 hours during market hours, shortly after central bank rate decisions, and shortly after underlying markets open following weekends. If a fetch fails, the site may display a cached “last-known-good” copy.
What does “Showing cached data” mean?
You’re seeing a stored snapshot rather than a fresh pull. This is a reliability feature so the page is never blank.
Can policy change between scheduled meetings?
Yes, in exceptional circumstances. The tool focuses on scheduled meetings and cannot anticipate unscheduled actions, though highly anticipated intra-meeting moves will likely still be reflected in the output.
Why might your numbers differ from other sources?
Different instruments, conventions (day count, calendars), and mapping assumptions can produce slightly different implied paths. See methodology page.
I found a bug or data issue — who do I contact?
Email: [email protected].