According to the CME FedWatch tool, there is a 99.8% probability that on July 26, the Federal Reserve will raise the rate by 25 basis points. Some analysts believe that the regulator will end the tightening cycle in July, which began in March 2022. Expectations of a policy reversal increased after fresh inflation data: the CPI and the PPI data. They showed a decrease in inflationary pressure. Consumer prices are approaching the target level of 2%.
The highest level of the CPE index was 9.1%. In June, it fell to 3%. This indicator is combined with the Producer Price Index, excluding food and energy, which tumbled by 0.2% in June.
A survey conducted by the University of Michigan showed that consumer sentiment soared to 72.6% in July, which was 13% higher than in June.
The Fed states that the rate decisions depend on incoming data. The US economy has shrunk, significantly lowering the inflation rate.
According to the CME indicator, the benchmark rate will remain unchanged at the September meeting, with a likelihood of 87.9%. In November, 87.9% of traders consider such a scenario and in December - 64%.
