Fed odds show 92% hold
- Traders now overwhelmingly expect the Federal Reserve to leave rates unchanged at its June 16-17 meeting after the late-April hold at 3.50%-3.75%. - CME FedWatch shows only about a 5% chance of a June cut, with futures implying just 1.2 basis points of easing by June 17. - That keeps the next inflation and jobs reports in charge, because one soft print probably will not be enough to force a cut.
Interest-rate markets have basically decided the Fed is not cutting in June. The next Federal Open Market Committee meeting ends June 17, and futures pricing now points to another hold after the Fed left its target range at 3.50% to 3.75% on April 29. The big shift is not the level of rates today. It is how little easing traders now expect just six weeks from now. (cmegroup.com) ### What changed? The Fed itself did not move this week. The move happened in market pricing. CME FedWatch, which converts fed-funds futures into implied meeting odds, shows the June meeting leaning heavily toward no change. One market-based tracker translating the same futures strip shows only a 4.8% probability of a cut at th(cmegroup.com)vel. In plain English — traders think June is almost certainly a pause. (cmegroup.com) ### Why are traders so sure? Because the Fed’s last message was not remotely dovish. In its April 29 statement, the committee kept rates at 3.50% to 3.75% and said developments in the Middle East were adding “a high level of uncertainty” to the outlook. That matters because oil shocks can leak into inflation fast, and the Fed does not like cutting while inflation risks are drifting up again. (federalreserve.gov) ### Why does futures pricing matter? FedWatch is not a poll of economists. It is a read on where money is actually positioned. Traders in 30-day fed-funds futures are effectively betting on the average policy rate that will prevail around each meeting. So when the implied move for June is only about 1.2 basis point(federalreserve.gov)be later” and “not next meeting.” (cmegroup.com) ### So is a June cut dead? Not mathematically. But the bar is high. A June cut would probably need a clear downside surprise in inflation, labor, or both — and fast. The key reports still ahead before the June 16-17 meeting are the next CPI release and the next Employment Situation report. Those are the prints most likely to move June pricing in a hurry. (bls.gov) ### Why does one hold matter so much? Because markets trade the path, not just the meeting. If June stays on hold, investors start pushing the first possible cut further out the calendar. That changes Treasury yields, mortgage expectations, bank funding costs, and the relative appeal of things like gold and growth stocks. A near-certain hold also tells (bls.gov)ng than cutting into another inflation flare. That is a very different regime from late 2025, when easing still looked more automatic. (rateprobability.com) ### What is the catch? Odds this high can still move a lot on one data point. Fed pricing is famously jumpy when CPI or payrolls land far from expectations. So “June hold” is the base case, not a promise. The market is pricing confidence, not certainty. (cmegroup.com) ### What should r(rateprobability.com)mentary. If inflation cools sharply and hiring weakens, June-cut odds can come back from the dead. If inflation stays sticky or energy pressure worsens, the hold gets even firmer and later meetings start repricing too. That is the real story here — not that the Fed is frozen, but that the market thinks the next move now needs more proof. (federalreserve.gov) ### Bottom line The market’s message is simple: June is no longer the meeting where traders expect relief. Until the next inflation and jobs numbers say otherwise, the default setting is wait. (cmegroup.com)
