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 26.1%, the probability of a cumulative increase of 25 basis points is 52.2%, and the probability of a cumulative increase of 50 basis points is 21.4%.
AI interpretation: The market's expectation of the Federal Reserve maintaining interest rates unchanged in the short term dominates, reflecting the current observation window of monetary policy. The pricing of interest rate futures shows that investors have divergent views on the subsequent path of interest rate hikes, but overall tend to maintain policy rates at their current high levels for a longer period of time. This expected structure suppresses the market's illusions about recent interest rate cuts and strengthens the persistence of a high interest rate environment. The financial market is readjusting asset pricing based on these probability distributions to cope with the long-term liquidity pressure brought about by the Federal Reserve's tightening cycle.
