Federal Reserve Decision Shifts Market Rate Expectations; July Hold Probability Falls to 64%, December Hike Odds Rise

According to CME FedWatch Tool data tracked by Jin10, following the Federal Reserve's recent rate decision, market expectations for future rate paths shifted significantly. The probability of the Fed holding rates steady through July dropped from 91% to 64%, while the likelihood of a 25 basis point rate increase surged from 8.9% to 35.1%.

For December, the odds of holding rates steady fell from 38.2% to 14.2%. Meanwhile, probabilities for cumulative rate increases rose substantially: a 25bp hike moved from 43% to 36.4%, a 50bp increase from 16.2% to 33.8%, and a 75bp hike from 2.4% to 13.5%.