According to data from CME Federal Reserve Watch on August 29, the probability of the Federal Reserve reducing interest rates by 25 basis points at the September meeting is 86.2%.

CME's report shows the probability of keeping interest rates unchanged is 13.8%. These figures reflect market expectations based on short-term interest rate futures prices.

MAIN CONTENT

  • Probability of a 25 basis point rate cut: 86.2%.

  • Probability of keeping interest rates unchanged: 13.8%.

  • Data sourced from CME Federal Reserve Watch, updated on August 29.

Is the Federal Reserve likely to cut interest rates by 25 basis points in September?

Short answer: According to CME Federal Reserve Watch on August 29, the probability of a 25 basis point cut is 86.2%.

Analysis: This figure reflects market expectations based on short-term interest rate futures prices. When the market places a high probability on the possibility of cuts, investors tend to adjust their portfolios towards a riskier stance, expecting borrowing costs to gradually decrease.

The probability of the Federal Reserve cutting interest rates by 25 basis points in September is 86.2%, with the probability of keeping rates unchanged at 13.8%.
CME Group, Federal Reserve Watch report, August 29

Why are the probabilities from CME Federal Reserve Watch important?

Short answer: CME provides estimates based on futures market data, reflecting the collective expectations of traders and investors.

Analysis: These estimates are often used as early indicators of monetary policy because they are based on actual trading prices. Although not official statements from the Federal Reserve, they help position risks and plan investments in the short term.

How will the rate cut event affect the cryptocurrency and financial markets?

Short answer: A rate cut typically supports risk assets, including stocks and cryptocurrencies, through lower capital costs.

Analysis: Lower interest rates can increase liquidity and encourage investment in riskier assets; however, the specific response depends on inflation expectations, economic growth rates, and the dynamics of quantitative cash flows. Investors need to consider short-term volatility and liquidity risks.

How should investors prepare for the expectation of rate cuts?

Short answer: Consider portfolio allocation, manage risks, and monitor official statements from the Federal Reserve.

Analysis: Diversifying the portfolio, setting clear stop-loss levels, and monitoring key economic data help reduce risks when the market adjusts. Note that market probabilities do not guarantee outcomes, and official decisions depend on meetings and economic reports.

Frequently Asked Questions

1. What is CME Federal Reserve Watch?

Understood as an index based on short-term interest rate futures prices, reflecting market expectations about the Federal Reserve's policy decisions.

2. Are the probabilities from CME absolutely accurate?

No; they reflect market expectations at the time of publication and can change rapidly based on economic information and statements from officials.

3. If the Fed cuts interest rates, will cryptocurrencies rise immediately?

Not necessarily; rate cuts can support risk assets, but short-term volatility also depends on market sentiment and technical factors.

4. How to track official updates from the Fed?

Monitor the meeting schedule and minutes of the Federal Reserve, along with statements from the Chair and relevant officials to stay updated on official information.

Source: https://tintucbitcoin.com/fed-cat-lai-thang-9-862/

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