What’s priced in for the Federal Reserve after CPI

The market continues to ratchet down bets on the Federal Reserve rapidly easing interest rates.

September Fed fund futures are now priced for a 56% chance of a 25 basis point cut and a 43% chance of a 50 bps cut. That’s a far cry from just last week when market watchers were talking about an emergency 75 bps cut and another 75 bps in September.

Looking further out, year end pricing is for 105 bps and there are 198 bps priced in through the June 2025 meeting.

While stock markets have been recovering, Treasury yields remain pressured with US 2-year yields at 3.95% today, not far from the panic low of 3.845%.

This article was written by Adam Button at www.forexlive.com.