Fed Holds Steady in July, Casting Shadow Over 2027 Interest Rate Outlook

U.S. federal funds futures indicate that traders are no longer fully betting on a Fed rate hike in September.

On July 29, the Federal Reserve decided to keep borrowing costs unchanged. According to a Bloomberg article, this has raised doubts in the market about the prospect of interest rate actions in September and beyond. Traders appear to be pushing back the timing of a 25-basis-point rate hike to October and have lost confidence in the expectation of two rate hikes before March next year.