CME FedWatch Tool shows 89% chance of a 25 bps rate cut in July

Eren Sengezer FXStreet

According to the CME Group's FedWatch Tool, following the FOMC's dovish monetary policy statement, markets are now pricing an 88.9% probability of a 25 basis points Fed rate cut in July compared to 68.5% seen on Tuesday. The odds of the Fed making two 25 basis points rate cuts by September is now 71.3% vs 50.6% yesterday.

The heightened probability of the rate cuts seems to be weighing on the greenback. Following the initial drop to a session low of 97.10, the US Dollar Index recovered modestly and was last seen down 0.4% on the day at 97.25 as investors are now waiting for Chairman Powell to deliver his remarks on the policy outlook.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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