CME FedWatch: Markets See July Hold as Base Case; September Tilts Toward a 25 bp Hike
AI Market Summary
CME FedWatch probabilities imply a high likelihood of no July move but a materially tighter distribution by September, with hike odds outweighing a hold. This reprices the near-term policy path and can lift front-end yields and support the dollar, tightening financial conditions. Cross-asset volatility may increase as rate-sensitive positioning adjusts around incoming inflation and labor data.
Impact level
● Medium
Affected assets
NCSIDXY2USD/USDT-0.10%
AI Insight · NCSIDXY2USD/USDTAI Insight
● Neutral
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CME's FedWatch data shows markets largely expect the Federal Reserve to keep rates unchanged at the July meeting. The odds of no move stand at 74.3%, while a cumulative 25-basis-point increase is priced at 25.7%.
By September, expectations are more divided. FedWatch puts the probability of rates remaining steady at 42.9%, a cumulative 25-basis-point hike at 46.2%, and a cumulative 50-basis-point hike at 10.8%.
