Fed 63.7% Chance to Hold Rates in July, 55.2% for 25bp Hike by September

Summary

According to CME FedWatch, there is a 63.7% probability that the Fed will maintain interest rates in July, while the probability of a 25bps hike in September has risen to 55.2% QQ News. This shift is driven by oil prices exceeding $100, geopolitical tensions, and a resilient labor market 观点网+ 2. Market reactions include rising Treasury yields and downward pressure on gold and equities 观点网+ 2.

Impact Analysis

So, the market is basically pricing in a ‘hawkish skip’ for July. While 63.7% expect a hold this week QQ News, the real story is the aggressive shift toward September. We’re seeing hike odds for Q3 climb to 55.2% QQ News, with some even betting on a 50bps jumbo move QQ News.

The catalyst? Oil breaking $100 and geopolitical tensions are reigniting the inflation narrative [citation:3, 33]. It’s a classic ‘higher for longer’ setup, but more painful. The Fed is clearly worried that the labor market is too strong to let up now 中金在线-财经.

Bottom line: Don’t be fooled by a July pause. Powell will likely use the presser to ‘prep’ the market for a September move . We’re already seeing yields spike and gold under pressure [citation:13, 15]. For the portfolio, I’d stay short duration and lean into energy hedges. If the Fed doesn’t push back on the $100 oil impact, growth stocks are going to face a serious valuation reset.