FedWatch shows 45.9% odds of a 25 bp Fed hike by September ahead of CPI
AI Market Summary
Ahead of CPI, CME FedWatch implies a split market: 54.1% odds of no change through September versus 45.9% for a cumulative 25 bp hike, with October pricing adding a 12.2% tail risk of 50 bp. This uncertainty can elevate rates and USD volatility as traders recalibrate terminal-rate expectations around the inflation print, tightening financial conditions if CPI surprises to the upside.
Impact level
● Medium
Affected assets
NCSIDXY2USD/USDT+0.01%
AI Insight · NCSIDXY2USD/USDTAI Insight
● Neutral
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Ahead of the CPI release, CME's FedWatch tool indicated markets were pricing a 54.1% chance the Federal Reserve keeps rates unchanged through September, versus a 45.9% probability of one cumulative 25-basis-point hike. For October, the odds implied a 39.7% chance of no change, a 48.1% chance of a cumulative 25-basis-point increase, and a 12.2% chance of a cumulative 50-basis-point increase. (Jin10)
