According to CME's "Federal Reserve Watch" data, the probability of the Federal Reserve keeping interest rates unchanged until October is 66.8%, and the probability of a cumulative 25 basis point rate hike is 33.2%; The probability of keeping interest rates unchanged until December is 9.1%, the probability of a cumulative increase of 25 basis points is 62.2%, and the probability of a cumulative increase of 50 basis points is 28.7%.
AI interpretation: There is a clear divergence in the market's pricing of the Federal Reserve's interest rate hike path, reflecting the intensification of investors' game between inflation stickiness and economic resilience. The increase in the probability of interest rate hikes directly pushes up short-term US bond yields and suppresses risk assets. This expected adjustment forces the market to reassess the tightening cycle of monetary policy, and the duration of the high interest rate environment will exceed previous expectations. Funds are flowing towards the concentration of US dollar assets in response to the liquidity tightening pressure brought about by the Federal Reserve's high interest rate policy.
