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CME Data Shows 91.9% Probability of Fed Rate Cut in October

CME Data Shows 91.9% Probability of Fed Rate Cut in October

CME's FedWatch tool indicates a 94.6% likelihood of a 25 basis point rate cut by the U.S. Federal Reserve this month, signaling shifting expectations for monetary policy.

Summary

CME's FedWatch tool now shows a 94.6% probability of a 25 basis point rate cut by the U.S. Federal Reserve in October. In contrast, there is a 5.4% chance that the Fed will keep rates unchanged, reflecting ongoing market uncertainty around monetary policy decisions.

Terms & Concepts
  • Basis Point: A unit of measure equal to one hundredth of a percentage point, commonly used to describe changes in interest rates.
  • CME FedWatch Tool: A market-based tool by the Chicago Mercantile Exchange that estimates the probability of Federal Reserve interest rate changes using futures pricing data.
  • Interest Rate Cut: A monetary policy action where a central bank lowers its benchmark interest rate to encourage economic activity.