CME: market increases bet on stable Fed interest rates this month and reduces cut scenario in March

The chance of the Federal Reserve (Fed) starting the monetary relaxation cycle this month has decreased in the last few hours, as indicated by the CME Group platform that monitors the behavior of the future curve. For the end of the year, the tool still points to the most likely scenario of an accumulated cut of 150 basis points in interest rates.

The probability of the base rate remaining between 5.25% and 5.50% at the January meeting was 91.2% at around 12:20 pm (Brasília time) this Wednesday, 3rd, compared to 87.6% the day before . As a consequence, the hypothesis of a reduction fell from 12.4% to 8.8%.

For March, the picture that appears most strongly is still one of monetary easing, but there was a decrease, from around 80% to 72.6% now. By the end of this year, the strongest pricing is for a cut to 3.75% to 4.00%. In this case, the market reduced the bet by a more aggressive decline, of 175 basis points (from 28.5% to 25.2%).