Retail Investors Must Read: The Federal Reserve's 'Insurance Rate Cut' is Just the Beginning of the Wealth Creation Myth!

The market is once again boiling over the Federal Reserve's rate cut expectations, and the key signals released by the CME rate watch tool are quietly reshaping the dynamics of capital market competition.

Currently, CME FedWatch data shows that the probability of maintaining rates in September is only 15.4%, while the probability of a 25 basis point cut is as high as 84.6%, which resonates strongly with the 95.7575 mid-term pricing indicated by the futures market.

It is particularly noteworthy that, although the market generally expects a rate cut, the target interest rate range is still anchored between 425-450 basis points, indicating that the market is not overly optimistic.

From the perspective of options positions, the ratio of PROG trading volume of 155,000 contracts to PROD open interest of 323,000 contracts shows a surge in hedging demand, suggesting that institutional investors are positioning themselves for potential policy changes.

Looking back at the September meeting during the 2023 rate hike cycle, the market's pricing accuracy for a pause in rate hikes was as high as 89%, indicating that CME futures tools have significant reference value for short-term policy predictions.

If a rate cut occurs as expected this time, it will be similar to the 'insurance rate cut' of 2019, potentially driving risk assets to repeat the 40% increase seen in the fourth quarter of that year.#美联储降息预期

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