how to calculate probability of change in interest rate

How do u predict the percentage and probabily of increase or decrease in possble interest rates...like when someone says ," there is a 20 percent chance rates will increase?

is it from a rate curve? what is that? thanks

How do you? That's tough to answer...has a lot to do with statistics and probabilities...yada yada yada.

Luckily your tax dollars have enabled the gov't to do this work for you!

http://www.clevelandfed.org/research...unds/index.cfm

Way to go Cleveland Fed!

Very cool GoatT, + lots of toys to play with. Thx.

its based on fed funds futures, which is a futures contract based on the the fed funds rate. basically you can trade your interest rate prediction like you can trade the EURUSD

here is the exact calculation of how they get the probability...

http://www.forexfactory.com/showpost...4&postcount=10