Traders are pricing in a 100% chance of at least one Fed rate cut in July

  • The fed funds futures market is now pointing to a 100% chance of an easing of monetary policy next month.
  • The market is also pointing to a 64% chance of one rate cut in the 2% to 2.25% range and a 36% probability of two cuts, according to the Chicago Mercantile Exchange (CME) Fed Warch tool.
  • The tool is based on futures pricing from live markets and reflects the views of traders placing real bets on the CME exchange.
  • The Fed decided to keep the benchmark rate in a target range of 2.25% to 2.5% on Wednesday. However, Fed chair, Jerome Powell said the case for a more accommodative policy has strengthened and added that policymakers are concerned about some of the recent economic developments.
  • The Fed also dropped the word “patient” from its statement.

 (Source: CNBC News)