The likelihood of the FED (Federal Reserve of the United States) deciding to cut interest rates in July has increased to 22.7% after two FED Governors, Waller and Bowman, publicly supported this. This signals a shift in market perception regarding interest rate adjustments, which could influence the FED's decisions in upcoming meetings.
Additionally, the desire of many to hold the position of FED Chair may lead them to voice support for interest rate cuts. These individuals may hope that expressing this viewpoint will create a positive impression with President Trump, thereby increasing their chances of being nominated for this position in the future.
The chart mentioned shows the percentage probabilities of the following possibilities:
- Likelihood of interest rate cut (400-425 bps): 22.7%
- No change in interest rates (425-450 bps): 77.3%
- Increase in interest rates (above 450 bps): 0.0%
This indicates that the current market primarily predicts that interest rates will remain unchanged, but is also considering the possibility of a rate cut, especially in the context of pressure from FED Governors and changes in the economy.