According to CME FedWatch, traders are pricing in a 99.5% probability that the Federal Reserve will maintain its benchmark interest rate at the upcoming meeting.
Why the Fed Is Expected to Hold Rates
The Federal Reserve has taken a cautious approach to monetary policy with officials emphasizing the need for further economic data before adjusting rates.
How the Market Reacts to a Rate Hold
Stock markets remain volatile with investors watching for Fed signals on future rate cuts. If rate cuts are delayed, crypto markets may see short-term volatility. A pause in rate cuts keeps bond yields elevated, influencing market liquidity.
What’s Next for Fed Policy?
Possible rate cuts in mid-2025 – If inflation declines further, the Fed may consider cuts later in the year. Investors will analyze Fed statements for any shift in policy outlook. Future rate decisions will depend on inflation, employment, and GDP trends.
With CME FedWatch showing near certainty on a rate hold, the focus shifts to when the Fed might start easing policy.
