Traders Boost Odds of 50-Basis-Point Rate Cut Following Powell’s Remarks
Implications of Powell's Speech on Rate Expectations
As Federal Reserve Chairman Jerome Powell concluded his address at the Jackson Hole symposium, traders pushed up the likelihood of a more aggressive monetary policy shift. With a newly calculated chance of a 50-basis-point rate cut at 32.5%, compared to 25% earlier, the sentiment in the market is shifting.
Market Reactions and Projections
The CME FedWatch Tool indicated a decrease in the anticipated 25-basis-point cut likelihood, now standing at 67.5%—a significant fall from 75%. This shift demonstrates traders’ responsiveness to Powell's remarks, emphasizing the market's sensitivity to inflation situations and economic reports.
- 50-basis-point cut chance: 32.5%
- 25-basis-point cut chance: 67.5%
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.