CME Data Shows 98.4% Probability Fed Holds Rates Steady in June

Summary

CME FedWatch data indicates a 98.4% probability that the Federal Reserve will maintain current interest rates in June, with a 90.2% chance of a hold continuing into July [Zhitong]. While immediate rate cuts are off the table, a small 8.4% probability of a rate hike has emerged for the July meeting [].

Impact Analysis

So, June is basically a total non-event with a 98.4% chance of a hold [Zhitong]. But don’t let the ‘pause’ narrative fool you—the real story is the lingering hawkishness. Back in mid-May, we saw a sharp shift where conviction grew for hikes by year-end due to ‘stiff inflation’ [QQ News+ 2]. Even now, July data shows an 8.4% chance of a hike versus a tiny 1.4% chance of a cut []. This ‘higher-for-longer’ reality is clearly biting, but not where you’d expect. Look at CME Group’s own stock; it’s been sliding for six straight days and is now nearly 24% off its 52-week high [MarketWatch Automated]. It’s a classic disconnect: the market is certain about the Fed’s immediate path, yet the exchange itself is getting repriced due to overvaluation and shifting volume expectations [Simplywall+ 2]. Bottom line? June is a snooze, but the July hawkish tail risk and the correction in exchange stocks suggest the market is finally choking on these high rates.