CME: FED RATE CUT PROBABILITY FOR DECEMBER SOARS TO 88.4%

According to the latest data from CME, the market is pricing in the likelihood of the Fed cutting interest rates in December at up to 88.4%, while the probability of holding steady is only 11.6%. The current target interest rate remains at 3.75%–4.00%.

This indicates that expectations for monetary easing are clearly dominating just two days before the FOMC. Historically, when the probability of a cut exceeds 80%, the market has typically reflected much of this scenario in asset prices.

However, risks still lie in the accompanying message (dot plot & statements from the Fed Chair). If the Fed appears more cautious than expected, short-term volatility in risk asset markets could potentially increase significantly. #fomc #FedRateDecisions