CME FedWatch and other market gauges show traders still favor a July hold, though pricing and strategist commentary indicate expectations for a possible later 25-basis-point Federal Reserve increase remain significant.
Market pricing continues to favor the Federal Reserve holding interest rates steady in July, with CME FedWatch showing 72.7% odds of no change and a 27.3% chance of a 25-basis-point hike as of July 11. Earlier figures cited by Odaily showed a 74.9% probability of a July hold, while LSEG data put the chance of a July increase at 22% after weak U.S. labor data last week pushed expectations for any final hike later into the year. Federated Hermes chief market strategist Phil Orlando said a July move is unlikely, arguing the Fed will probably look through what he described as a temporary energy supply shock and keep rates unchanged. By September, an earlier market snapshot showed more hawkish expectations, with 35.7% odds of no change, 51.1% odds of a cumulative 25-basis-point hike and 13.1% odds of a cumulative 50-basis-point hike.