CME's FedWatch Predicts 94.8% Chance of Interest Rate Unchanged in July

According to CME's FedWatch data, the probability of the Fed maintaining the interest rate unchanged in July is 94.8%, with a 5.2% chance of a 25-basis-point rate cut. The probability of the Fed keeping the interest rate unchanged in September is 35.9%, while the cumulative probability of a 25-basis-point rate cut is 60.9% and the cumulative probability of a 50-basis-point rate cut is 3.2%.

The Federal Reserve's policy-making decisions are a hot topic among investors and financial professionals, particularly with the upcoming Federal Open Market Committee (FOMC) meetings. According to CME's FedWatch data, the probability of the Fed maintaining the interest rate unchanged in July is 94.8%, with a 5.2% chance of a 25-basis-point rate cut [2].

Looking ahead to September, the probability of the Fed keeping the interest rate unchanged is 35.9%, while the cumulative probability of a 25-basis-point rate cut is 60.9% and the cumulative probability of a 50-basis-point rate cut is 3.2% [2]. These figures highlight the increasing likelihood of rate cuts as the year progresses, reflecting the evolving economic landscape.

The recent jobs report, which showed strong employment gains and a decrease in the unemployment rate, has bolstered the case for a "wait-and-see" approach from the Fed. The report also indicated that the labor market is robust, which could lead to a more cautious stance on rate cuts [2].

Goldman Sachs has revised its expectations for the Federal Reserve's interest rate cuts, now predicting that the central bank will reduce rates in September, October, and December of this year, as well as in March and June of 2026. The bank's economists believe that there is more room for rate cuts than previously thought, which could support lower yields [4].

The Federal Reserve has not ruled out the possibility of rate cuts in July, with Fed Chair Jerome Powell stating that the decision would depend on the economic data. Short-term interest-rate futures pointed to about a one-in-four chance of a rate cut by the Fed's July 29-30 meeting after Powell's comments at a central banking conference in Sintra, Portugal [3].

In conclusion, the probability of the Fed maintaining the interest rate unchanged in July is high, but the likelihood of rate cuts increases significantly as the year progresses. Investors and financial professionals should closely monitor the economic data and the Fed's policy decisions to stay informed about potential changes in interest rates.

References:
[1] https://www.ttnews.com/articles/fed-rates-zero-chance-2025
[2] https://www.yahoo.com/lifestyle/articles/chances-fed-interest-rate-cut-135408868.html
[3] https://www.reuters.com/business/fed-rate-cut-bets-rise-after-powell-doesnt-rule-out-july-2025-07-01/
[4] https://www.ainvest.com/news/goldman-sachs-predicts-3-rate-cuts-fed-year-2507/