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Fed Rate Cut Odds Jump to 98% After U.S. Jobs Data

Fed Rate Cut Odds Jump to 98% After U.S. Jobs Data

Following today's FOMC statement, market expectations for a Federal Reserve rate cut in October surged, with a 94% probability now assigned to a reduction, up from 71.6% before the statement.

Summary

Following the FOMC statement, U.S. interest rate futures now reflect a 94% probability of a Federal Reserve rate cut in October, significantly higher than the 71.6% probability before the statement. The shift underscores growing market anticipation for an easing of U.S. monetary policy at the Fed’s next meeting.

Terms & Concepts
  • Federal Reserve Rate Cut: A monetary policy action where the U.S. central bank lowers the federal funds rate to stimulate economic activity.
  • CME Fed Watch: A tool provided by the Chicago Mercantile Exchange that calculates probabilities of Federal Reserve rate decisions based on futures market pricing.
  • Basis Points (bps): A unit equal to 0.01% used to measure changes in interest rates or yields.