An interest rate hike in the US leads to strengthening in the Dollar and this tool can be used to foresee the situation in advance and make a correct trading decision. The probability of above 50% indicates that more market participants assume the Fed will increase the interest rate by 0.25% at the upcoming meeting. Probabilities below 50% indicate that market participants do not expect the rate to be increased at the nearest meeting.

Interest rate hike probability expresses the market expectation of a probable tightening of US monetary policy following Federal Open Market Committee’s (FOMC) meeting outcome. The probability is computed by using the prices of 30-Day Federal Funds Futures that are traded on the Chicago Mercantile Exchange.