At the US Federal Reserve’s July 27 Federal Open Market Committee (FOMC) meeting, the Fed left rates unchanged at 3.50 per cent – 3.75 per cent, as was widely expected. Ahead of the meeting, the overnight index swap (OIS) market had priced in a 25bp rate hike with a 35 per cent probability.  This pricing struck me as being highly unrealistic, because it was a meeting in which the FOMC did not give an update on its summary of economic projections.  I could not see how the FOMC would move on rates in the absence of a new set of…

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