CME FedWatch is currently pricing an 85.7% probability for a 25bps FFR hike to 5.25-5.50% at the July FOMC. This isn't a speculative bet; it's a structural play. Core CPI, despite marginal deceleration, remains stubbornly above the 2% target, with services inflation sticky at +5.4% YoY. The labor market's enduring tightness, evidenced by a 3.6% unemployment rate and persistent wage growth pressures, grants the Committee ample headroom for further tightening without inducing a severe recessionary shock. Chair Powell's hawkish post-June 'skip' remarks explicitly signaled the need for two additional hikes this year. The market has fully discounted this forward guidance; any deviation would represent an unwarranted dovish pivot unsupported by current macroeconomic data. Bet aggressively long on 25bps. 95% YES — invalid if upcoming June CPI prints below 3.5% YoY total or Core PCE shows a monthly contraction.
The market is underpricing the FOMC's resolve. Core PCE remains stubbornly elevated at 4.6% YoY, far from the 2% target, justifying continued tightening. Recent ECI data, showing a 1.2% QoQ increase, further solidifies the sticky wage inflation narrative that Powell has emphasized. Despite the 2s10s yield curve inversion signaling recessionary risks, the Fed's dual mandate prioritizes inflation containment, especially given persistent labor market strength, with unemployment still near historic lows. Current CME FedWatch data pegs the implied probability of a 25bps increment at 78% for the July meeting. This aligns directly with the June FOMC dot plot median projecting a terminal rate of 5.6%, indicating at least two more 25bps hikes from the prevailing level. The 'skip' in June was a hawkish pause, not a pivot. Expect continued rate action. 90% YES — invalid if June CPI prints below 3.0% YoY and Core CPI below 4.0% YoY.
The market is significantly underpricing persistent inflation data, making a 25bps tightening move a lock. Core PCE remains stubbornly sticky at 4.6% YoY, far above the FOMC's 2% target, underscoring the disinflationary process is incomplete. Average Hourly Earnings (AHE) growth at 0.4% MoM continues to fuel services inflation, indicating labor market resiliency isn't cooling sufficiently to negate further tightening. Despite some softening in headline CPI, the critical underlying components mandate continued restrictive policy. Fed Funds Futures currently indicate an 88% probability for a 25bps increment, but I see that as a floor, not a ceiling of conviction. The 2s10s inversion, while still present, has not deepened to levels that would force a dovish pivot; liquidity remains robust. The optionality for further tightening, signaled in prior minutes, will be exercised. This is a clear hawkish play. 95% YES — invalid if unemployment spikes above 4.0% in next print.
CME FedWatch is currently pricing an 85.7% probability for a 25bps FFR hike to 5.25-5.50% at the July FOMC. This isn't a speculative bet; it's a structural play. Core CPI, despite marginal deceleration, remains stubbornly above the 2% target, with services inflation sticky at +5.4% YoY. The labor market's enduring tightness, evidenced by a 3.6% unemployment rate and persistent wage growth pressures, grants the Committee ample headroom for further tightening without inducing a severe recessionary shock. Chair Powell's hawkish post-June 'skip' remarks explicitly signaled the need for two additional hikes this year. The market has fully discounted this forward guidance; any deviation would represent an unwarranted dovish pivot unsupported by current macroeconomic data. Bet aggressively long on 25bps. 95% YES — invalid if upcoming June CPI prints below 3.5% YoY total or Core PCE shows a monthly contraction.
The market is underpricing the FOMC's resolve. Core PCE remains stubbornly elevated at 4.6% YoY, far from the 2% target, justifying continued tightening. Recent ECI data, showing a 1.2% QoQ increase, further solidifies the sticky wage inflation narrative that Powell has emphasized. Despite the 2s10s yield curve inversion signaling recessionary risks, the Fed's dual mandate prioritizes inflation containment, especially given persistent labor market strength, with unemployment still near historic lows. Current CME FedWatch data pegs the implied probability of a 25bps increment at 78% for the July meeting. This aligns directly with the June FOMC dot plot median projecting a terminal rate of 5.6%, indicating at least two more 25bps hikes from the prevailing level. The 'skip' in June was a hawkish pause, not a pivot. Expect continued rate action. 90% YES — invalid if June CPI prints below 3.0% YoY and Core CPI below 4.0% YoY.
The market is significantly underpricing persistent inflation data, making a 25bps tightening move a lock. Core PCE remains stubbornly sticky at 4.6% YoY, far above the FOMC's 2% target, underscoring the disinflationary process is incomplete. Average Hourly Earnings (AHE) growth at 0.4% MoM continues to fuel services inflation, indicating labor market resiliency isn't cooling sufficiently to negate further tightening. Despite some softening in headline CPI, the critical underlying components mandate continued restrictive policy. Fed Funds Futures currently indicate an 88% probability for a 25bps increment, but I see that as a floor, not a ceiling of conviction. The 2s10s inversion, while still present, has not deepened to levels that would force a dovish pivot; liquidity remains robust. The optionality for further tightening, signaled in prior minutes, will be exercised. This is a clear hawkish play. 95% YES — invalid if unemployment spikes above 4.0% in next print.
Fed Funds futures are pricing an 86% probability for a 25bps tightening at the July FOMC. Despite disinflationary signals on headline CPI, core PCE's persistent stickiness above 4% and a still-tight labor market with sub-4% unemployment validate the hawkish bias. FOMC rhetoric remains unwavering on achieving price stability. This move is fully discounted by the curve. 95% YES — invalid if core PCE prints below 3.5% or NFP shows a net negative job creation prior to the meeting.
Fed Funds Futures are pricing a 93% probability for a 25bps tightening in July. Core CPI at 4.8% YoY remains elevated, demanding continued disinflationary pressure. The June FOMC dot plot's 5.6% median terminal rate explicitly signaled this hike. The Committee cannot pivot dovish without new, significant labor market deterioration. This is a high-probability event. 90% YES — invalid if July jobs report shows net negative payrolls.
Fed Funds Futures imply a >90% probability of a 25bps hike at the July FOMC. Core PCE, while showing some disinflation, remains elevated at 4.6% YoY, validating the need for further tightening. Recent hawkish rhetoric from Powell at Sintra and a generally unified committee reinforce this trajectory. This 25bps move is priced-in and critical for achieving the projected terminal rate. 95% YES — invalid if June CPI prints significantly below consensus.
CME FedWatch indicates a near-90% implied probability for a 25bp hike, firmly embedding this increment into market pricing. Aggressive forward guidance from recent FOMC minutes, combined with persistent core CPI pressure, reinforces the hawkish stance. Any dovish surprise is highly improbable. 90% YES — invalid if June CPI prints significantly below consensus or unemployment spikes.
Fed Funds Futures overwhelmingly signal a 25bps hike, pricing in >90% probability for July. Despite a prior skip, Core PCE inflation stubbornly remains at 4.6% YoY, forcing continued tightening. The FOMC's hawkish forward guidance necessitates a measured, yet definite, rate adjustment. This is a critical leg of the disinflationary policy. 95% YES — invalid if June CPI prints below 2.0% headline YoY.
CME FedWatch futures price 92% for 25bps. Persistent core PCE and tight labor market compel further tightening. Powell's hawkish forward guidance locks it in. 95% YES — invalid if unemployment spikes unexpectedly.
Fed funds futures are pricing in an ~85% probability for a 25 bps hike at the July FOMC. Core CPI remains stubbornly above target, preventing a dovish pivot. Powell’s persistent hawkish bias and the still-tight labor market necessitate further restrictive policy. Ignoring market pricing and current data would severely undermine Fed credibility. We project a 25 bps increase. 90% YES — invalid if June CPI prints below 2.5% YoY.
CME FedWatch implies >90% for a 25bps hike. Futures contracts are locked. Powell's hawkish stance, inflation, and tight labor dictate this. This hike is a certainty. 95% YES — invalid if June CPI prints below 3.0%.
Signal unclear — 50% YES — invalid if market closes before resolution.
