The probability of the Federal Reserve raising interest rates by 25 basis points in September is 60.4%, and the probability of a rate hike in October has been announced

According to CME's "Federal Reserve Watch", the probability of the Fed keeping interest rates unchanged until September is 39.6%, and the probability of a cumulative 25 basis point rate hike is 60.4%. The probability of the Federal Reserve keeping interest rates unchanged until October is 29.1%, the probability of a cumulative increase of 25 basis points is 54.9%, and the probability of a cumulative increase of 50 basis points is 16.1%. AI interpretation: The market's pricing of the Federal Reserve's interest rate hike path reflects a high expectation of policy tightening. The current focus of interest rate decision-making has shifted from maintaining the status quo to further raising interest rates, which directly raises the market's pricing for the sustainability of high interest rate environments. This expected shift significantly suppresses the valuation space of risk assets and strengthens the safe haven nature of the US dollar. Investors are readjusting their asset allocation based on this clear hawkish signal to cope with the liquidity pressure brought about by monetary policy tightening.