Fed Likely to Hold Rates in June, 95.4% Chance of No Change

According to the latest data from CME's "FedWatch," there are 17 days remaining until the next Federal Open Market Committee (FOMC) meeting. The probability of a 25 basis point rate cut in June is 4.6%, while the probability of rates remaining unchanged is 95.4%. This indicates a strong likelihood that the Federal Reserve will maintain current interest rates in the near term.

Looking ahead to July, the probability of the Fed maintaining rates is 73.7%. The cumulative probability of a 25 basis point rate cut in July is 25.2%, and the cumulative probability of a 50 basis point rate cut is 1%. These figures suggest that while a rate cut is possible, the more likely scenario is that rates will remain stable or see only a modest adjustment.

This data reflects the current economic outlook and the Fed's cautious approach to monetary policy. With inflation and economic growth being closely monitored, the Fed is likely to proceed with caution, avoiding any drastic changes to interest rates unless economic conditions warrant such action. The low probability of a rate cut in June underscores the Fed's commitment to stability, while the slightly higher probabilities for July indicate a willingness to adjust policy if necessary.