Fed September Hold Probability Drops to 36.8% as Hike Expectations Surge

CME Fed Watch data reveals a sharp shift in market pricing, with the likelihood of a September rate hold falling significantly while expectations for a 25bps hike rise to 63.2%.

Woofun AI data shows that CME Fed Watch probabilities indicate a 36.8% chance of the Federal Reserve keeping rates unchanged in September, up from 17.8% prior to the recent decision. The market now prices a 63.2% probability for a cumulative 25 basis point hike, compared to 60.2% previously, while the likelihood of a 50 basis point hike has dropped to 0% from 22%. For October, the probability of holding rates steady stands at 26.2%, with a 55.6% chance of a 25 basis point increase and an 18.2% chance of a 50 basis point hike.