The probability of the Federal Reserve raising interest rates by 25 basis points in December is 72%.

According to CME's FedWatch tool, the probability of the Federal Reserve keeping interest rates unchanged in December is 28%, and the probability of a 25 basis point rate hike is 72%. The probability of the Federal Reserve keeping interest rates unchanged by January next year is 19.3%, the probability of a cumulative 25 basis point rate hike is 58.4%, and the probability of a cumulative 50 basis point rate hike is 22.3%. AI Interpretation: Market pricing in the Fed's interest rate hike path has shifted significantly, with the high probability of rate hikes directly reflecting a deep consensus in the market that tightening policies will continue. This pricing logic has completely suppressed any illusions of a short-term shift to easing monetary policy, forcing investors to reassess asset valuations in a high-interest-rate environment. Fund flows will accelerate towards defensive assets to cope with the liquidity tightening pressure brought about by persistently high interest rates. This clear hawkish expectation anchor signifies that the market has fully accepted the reality of interest rates remaining high over a longer period.