CME FedWatch: Markets price 85.6% chance of Fed holding rates in July; September hold odds 41.4%
AI Market Summary
CME FedWatch pricing implies a high probability of a July hold but a material tilt toward at least one hike by September, signaling "higher for longer" policy expectations. The repricing reduces near-term easing bets, tightening financial conditions and pressuring rate-sensitive assets. A firmer expected policy path typically supports the USD via yield differentials and can weigh on risk assets through higher discount rates.
Impact level
● High
Affected assets
NCSIDXY2USD/USDT+0.00%
AI Insight · NCSIDXY2USD/USDTAI Insight
▼ Bearish
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CME’s FedWatch tool shows markets assigning an 85.6% probability that the Federal Reserve will keep interest rates unchanged at its July meeting, versus a 14.4% chance of a cumulative 25-basis-point increase.
By September, pricing shifts: the probability of rates remaining unchanged falls to 41.4%, while the odds of a cumulative 25-basis-point hike rise to 51.2%. Markets see a 7.5% chance of a cumulative 50-basis-point increase.
The rate path implied by these probabilities points to broad conviction in a near-term policy pause, alongside a growing expectation that sticky inflation could keep tightening on the table later in the year. The repricing also weakens the case for rapid rate cuts in 2026, as investors position for an extended period of higher rates.
