CME FedWatch tool indicates a 59.9% probability of the Fed keeping rates unchanged in September

Summary

Latest CME FedWatch data shows a 59.9% probability that the Fed will maintain interest rates in September, with a 40.1% chance of a 25bps hike 钛媒体快讯. This represents a major reversal from early August, when the probability of a hike was as high as 67.2% . Looking toward October, the market remains split, with a 45.3% chance of holding rates steady 钛媒体快讯.

Impact Analysis

So the market is basically calling the Fed’s bluff on that September hike. Look at the momentum: we’ve swung from a 67% chance of a hike on August 6th to a 60% chance of a pause today 钛媒体快讯. That is a violent shift in sentiment for just one week of trading. It tells me the ‘higher for longer’ narrative is losing its grip, and investors are aggressively front-running a cooling cycle or a ‘hawkish skip.’

But here’s the catch—while September looks like a ‘pause’ now, the October outlook is still a coin toss, with a 44.9% chance of a cumulative 25bps hike 钛媒体快讯. The market is trying to have its cake and eat it too by pricing a near-term reprieve while remaining undecided on the terminal rate. I’m skeptical of this sudden pivot in expectations. If upcoming macro data doesn’t perfectly align with this ‘pause’ thesis, we’ll see a sharp, painful correction in front-end yields. Bottom line: the consensus moved too fast—don’t chase the duration rally yet.