Why I built Central Bank Watch and what I'm trying to achieve
I've studied business and finance and have been working in the financial services sector for almost 20 years (and still do!). I have worked with various financial instruments including interest rate derivatives, and I've always been fascinated by interest rate dynamics and monetary policy.
I found myself regularly using the CME Group's "Fed Watch" tool—an industry-standard resource that calculates the probability of Federal Reserve interest rate decisions based on futures market prices. It's a valuable tool that many financial professionals rely on daily.
But I kept wondering: Why is there a Fed Watch tool but nothing comparable for e.g. the European Central Bank or the Bank of England?
It seemed odd. After all, the ECB and BoE are just as important for global financial markets. When I started looking into it, I began to understand why. While the Fed's target interest rate, the Fed Funds rate, is traded directly in US markets, the comparable target rates for the European Central Bank and the Bank of England are not traded. So one needs to look for proxies or erstatz rates for those target rates with all complications that brings with it. These aren't insurmountable problems, but they do require careful thought and some methodological decisions. Indeed, the CME publishes data for those proxies or "ersatz rates" but they stop short of providing a direct equivalent to the Fed Watch tool. You can read more about how I approached these challenges on the methodology page.
So I decided to try building it myself as a spare-time project—partly out of curiosity, partly as a learning exercise, and partly because I thought it might be useful to others who share my interest in central bank policy. It took me more than two years of evenings and weekends between job and family from first idea to completion. Although it still feels like work in progress, I'm pleased to finally share the results with you here.
Starting with the Federal Reserve seemed like the logical first step. The CME Fed Watch tool is the industry benchmark, so I could validate my methodology by comparing my calculations against their published probabilities.
This turned out to be both reassuring and humbling. Having set up my probability calculation tool, and having checked this meticulously against the CME's published methodology, I never achieved perfect alignment with their probability figures. Even when I hand-typed their futures prices into my model and followed their published methodology exactly, I never got a 100% match with all their probability figures. While I could hit their near-term probabilities for the next few meetings spot on, there always was a small discrepancy for meetings further out in the future. The closest I got was around 97% consistency, which I eventually accepted as good enough. I couldn't quite figure out whether the small differences were due to rounding conventions, some calendar adjustment I was missing, or perhaps minor methodological details that aren't fully documented. But the close alignment gave me confidence that I was on the right track and hadn't fundamentally misunderstood the approach.
With that validation behind me, I felt comfortable expanding the framework to the ECB and BoE.
This project is still under active development. My goals are relatively straightforward:
To make the content more accessible to a wider audience, I have implemented a beginner/expert toggle on each page, so that users can choose the content and level of detail based on their background. I'm exploring expansion to other central banks.
I hope this site is helpful to you. If you like it, don't like it, or think something is missing, buggy or odd, I'd genuinely appreciate hearing from you. You can reach me at info@centralbank.watch.
This is a spare-time project, so please bear with me if responses aren't immediate—but I do read and value all feedback.