CME Data Shows: Fed Has 73.3% Chance to Hold Rates in July, Rate Hike Expectations Rise for September

Summary

CME FedWatch data shows a 73.3% probability of the Fed maintaining rates in July, but expectations for a September hike have surged, with a 52.7% chance of a 25bps increase and a 14.9% chance of 50bps Zhitong. While soft June payroll data initially cooled hawkishness, the June FOMC minutes revealed deep concerns regarding inflation fueled by AI investment and geopolitical tensions Zhitong+ 2.

Impact Analysis

So the market is finally waking up to the reality that the ‘dovish pivot’ was premature. While everyone was obsessing over that soft June payrolls print of 57k Zhitong, the June FOMC minutes tell a much grittier story Sina Finance. The Fed is clearly more spooked by structural inflation—think AI capex, tariffs, and Middle East volatility—than a cooling labor market Sina Finance.

We’re looking at a classic ‘hawkish skip’ in July Zhitong. By holding now but signaling a 67%+ cumulative probability of a hike by September , they’re trying to preserve credibility without over-tightening too soon. The popular narrative that ‘AI leads to rate cuts’ is officially under fire Wallstreetcn.

Bottom line: The dollar is finding its legs again FX678, and gold is losing its luster as real yields face upward pressure Stock Invest. If you’re long duration in fixed income, this summer is going to be painful Wallstreetcn. I’d be looking to play the yield curve and staying cautious on high-multiple tech that’s sensitive to that discount rate.