According to CME's "Federal Reserve Watch", the probability of the Federal Reserve keeping interest rates unchanged in July is 63.7%, and the probability of a cumulative 25 basis point rate hike is 36.3%; The probability of the Federal Reserve keeping interest rates unchanged until September is 18.5%, the probability of a cumulative increase of 25 basis points is 55.7%, and the probability of a cumulative increase of 50 basis points is 25.8%.
AI interpretation: The market's expectation of the Federal Reserve maintaining interest rates unchanged in the short term dominates, reflecting the current observation window period of monetary policy. The pricing of the interest rate path shows a high level of vigilance towards inflation stickiness, with interest rate expectations significantly rising in September. This pricing structure directly suppresses the market's premature fantasies about loose policies and strengthens the market consensus of a long-term high interest rate environment. Investors are reassessing the end of the tightening cycle, and the flow of funds will tilt towards defensive assets.
