### Calculation of fed hike/cut probabilities

Posted:

**February 9th, 2018, 12:05 pm**How do I calculate the probability of Fed cutting the rate using both Fed Fund Futures and OIS rates?

I have attached the Fed hike probabilities quoted on Bloomberg on the 24

[attachment=0]FED ssh'er 2018-01-24.PNG[/attachment]

I have figured out how to calculate the hike probability (by following http://www.cmegroup.com/education/fed-f ... lator.html), and since the cut probabilities are 0%, I can also calculate the no change probability by following

P(no change) = 100% - P(hike).

But if the cut wasn't 0%, the formula would be

P(cut) + P(hike) + P(no change) = 100%

Does anyone know how to calculate P(cut)?

I have attached the Fed hike probabilities quoted on Bloomberg on the 24

^{th}of January 2018. The second column shows hike probability, while the third and fourth shows cut probability and probability of no change, respectively.[attachment=0]FED ssh'er 2018-01-24.PNG[/attachment]

I have figured out how to calculate the hike probability (by following http://www.cmegroup.com/education/fed-f ... lator.html), and since the cut probabilities are 0%, I can also calculate the no change probability by following

P(no change) = 100% - P(hike).

But if the cut wasn't 0%, the formula would be

P(cut) + P(hike) + P(no change) = 100%

Does anyone know how to calculate P(cut)?