8th August 2018

8th August 2018 – WIRP<GO>

The most important numbers in finance are the overnight interest rates set by the world’s main Central Banks such as the Federal Reserve, the European Central Bank, Reserve Bank of India (RBI) and the Bank of England. They are akin to the accelerator and brake pedals in a car. Wouldn’t it be nice to know what investors think will happen at the next interest rate committee meeting? With Bloomberg you can! You will sound smart in interviews by not only knowing whether a rate hike or cut is on the cards but also knowing the percentage probability of this outcome.

WIRP

  • To access these probabilities:
    • Type WIRP <GO> into the command line to go to the World Interest Rate Probability function.
    • Select the Central Bank of interest using the amber drop-down in the top left (US, Eurozone, UK, Japan, Canada, Sweden, Australia, New Zealand, India and Mexico).
    • The next meeting date of the selected Central Bank is then displayed in the top left of the table, for example the RBI meets the next time on October 4, 2018.
    • Hover the mouse over the legend of the chart at the bottom:
      • The White line shows the percent probability of a rate hike at the next meeting.
      • The blue line shows the percent probability of no change in interest rates at the next meeting.
      • The red line shows the percent probability of a cut in interest rates at the next meeting.
      • The actual percent probability for each is listed in the legend and the three numbers will always add up to 100%.
    • The cool thing about this chart is that you can see how those beliefs have evolved over time.