ChainCatcher, citing Jinshi, reported that CME FedWatch data now shows a 64% probability that the Federal Reserve will keep interest rates unchanged by July. Before the decision, that probability stood at 91%. The probability of a cumulative 25-basis-point rate hike has risen to 35.1%, compared with 8.9% before the decision, while the probability of a cumulative 50-basis-point hike is now 1%, up from 0% previously.
For the July time frame, the updated figures show a clear shift in the distribution of rate-path probabilities listed by CME FedWatch: the probability assigned to no change has moved lower, while the probability assigned to a 25-basis-point increase has moved higher. CME FedWatch is used to track the probabilities implied by interest-rate futures pricing, and the latest update compares the readings before and after the decision across several cumulative rate-hike scenarios.
Looking ahead to December, the probability that rates remain unchanged is listed at 14.2%, down from 38.2% before the decision. The probability of a cumulative 25-basis-point hike is 36.4%, compared with 43% before the decision, while the probability of a cumulative 50-basis-point hike is 33.8%, up from 16.2%. CME FedWatch also shows a 13.5% probability of a cumulative 75-basis-point hike, versus 2.4% before the decision, and a 2.1% probability of a cumulative 100-basis-point hike, compared with 0.1% previously.