According to CME's "Federal Reserve Watch", the probability of the Federal Reserve keeping interest rates unchanged until July is 64.0% (pre decision: 91.0%), the probability of a cumulative 25 basis point rate hike is 35.1% (pre decision: 8.9%), and the probability of a cumulative 50 basis point rate hike is 1% (pre decision: 0%); The probability of the Federal Reserve keeping interest rates unchanged until December is 14.2% (pre decision 38.2%), the probability of a cumulative 25 basis point rate hike is 36.4% (pre decision 43.0%), the probability of a cumulative 50 basis point rate hike is 33.8% (pre decision 16.2%), the probability of a cumulative 75 basis point rate hike is 13.5% (pre decision 2.4%), and the probability of a cumulative 100 basis point rate hike is 2.1% (pre decision 0.1%).
AI interpretation: After the Federal Reserve's interest rate decision, there has been a drastic restructuring of market pricing, and expectations for interest rate hikes have significantly increased. Investors have significantly lowered the probability of keeping interest rates unchanged and instead bet on a more aggressive tightening path. This shift directly reflects the market's reassessment of the tightening cycle of monetary policy, strengthening expectations of a longer duration of high interest rate environment. The rapid switching of fund flows indicates that the market is digesting more severe liquidity pressure, which directly suppresses risky assets.
