FOMC Meeting Outlook: Will the Federal Reserve Delay Rate Cuts Further?
As we approach mid-June, the market's focus is on the interest rate decision of the Federal Open Market Committee (FOMC) in the United States.
According to CME FedWatch prediction data, the market generally expects the June 18 FOMC meeting to keep interest rates unchanged (currently at 425 to 450). The probability of a 25 basis point cut is only 2.6%, while the probability of maintaining the current rate level is as high as 97.4%.
However, the outlook for September 25 is quite different. The forecast shows a 60.8% probability of a rate cut, while the likelihood of maintaining the current rate has decreased to 39.2%.
Specifically, the probability of a 25 basis point cut is 51.8%, while the probability of a 50 basis point cut is 8.8%, and the probability of a 75 basis point cut is just 0.2%.
Looking at the observation data for December 10 this year, the expected probability of a 25 basis point cut is 30.6%, the probability of a 50 basis point cut is as high as 39.3%, the probability of a 75 basis point cut is 19.3%, and the probabilities of a 100 basis point and 125 basis point cut are 2.6% and 0.1%, respectively.
In summary, the market generally expects a higher probability of rate cuts in the September and December meetings, potentially deciding to cut rates at least once or twice, with a maximum cut of 50 basis points.
However, it is important to remind everyone that despite the relatively optimistic expectations for rate cuts by the end of this year, factors such as U.S. tariff policies, the employment market situation, core inflation data, and the global economic environment may all significantly impact the Federal Reserve's final decision.
Therefore, investors should closely monitor relevant economic data and policy signals to timely adjust investment strategies to cope with various uncertainties.
What do you think? How many times do you believe there will be rate cuts by the end of the year, and what do you think will be the maximum cut? Feel free to share your insights in the comments!