Is a rate cut in December almost a certainty? The market bets on an 87.6% probability, and the trend for next year is starting to diverge.

Question

[比推] The latest data on CME Intrerest Rate futures shows that the market's expectations for the December interest rate meeting are quite clear—there is an 87.6% probability betting on a 25 basis point rate cut, while only 12.4% believe that there will be no change.

Looking ahead to January next year, the situation begins to diverge: nearly 70% probability (69.3%) expects a cumulative decrease of 25 basis points, 20% probability (21.3%) expects a decrease of 50 basis points, and less than 10% (9.3%) believe that the status quo may be maintained.

Behind this wave of expectations lies the market's judgment on the path of economic soft landing—whether to proceed cautiously or require more aggressive easing? The answer may be hidden in the upcoming inflation data and employment reports.

FOMOSapien · Accepted Answer

87.6%... This number seems a bit too exact, I always feel there will be a Reverse operation.

With such severe differentiation next year, it indicates that no one really knows what&#39;s going on.

The inflation data is the real bomb, just wait and see.

With interest rates being lowered to this extent, can we still expect a soft landing? I doubt it.

LeekCutter · Answer

87.6%? This data sounds too neat, it always feels like someone is manipulating it behind the scenes.

Next year we still have to look at the inflation data&#39;s expression, to put it bluntly, we just don&#39;t know how to proceed.

50 basis points rate cut? What are you thinking, the Fed is not that generous.

Soft landing is just a joke, how could it be so smooth?

VCsSuckMyLiquidity · Answer

87.6%? This probability is too high, it really feels like the market has made up its mind to cut interest rates this time.

The differentiation next year is so severe, it feels like no one really knows what will happen.

Inflation and employment data are the real keys, everything else is just empty talk.

Soft landing? Laughing to death, let&#39;s see the actual data.

However, whether it&#39;s 25 or 50 basis points, the difference doesn&#39;t seem as big as imagined.

GasFeeCrybaby · Answer

87.6%? Can this number really be trusted? It feels like the market is just gambling.

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Soft landing? I think that&#39;s just wishful thinking; the truth will be revealed once the inflation data comes out.

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The differentiation next year is so severe; it&#39;s either a big drop or no change at all. Is the middle path really that difficult?

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The employment report is the real trump card; everything else is just noise.

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Every day they shout about interest rate cuts, but in the end, it&#39;s still about reacting to the data.

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25 or 50 basis points, the difference is huge; we need to keep a close eye on January.

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Again, "the answer is hidden in X"; I&#39;ve heard your rhetoric too many times, haha.

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With the market so certain about interest rate cuts, wouldn’t a reverse operation be the right approach?

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The 12.4% staying put are probably the clear-headed ones, who knows?

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With this kind of differentiation in January, it feels like something big is about to happen; suckers, are you ready?

MeaninglessGwei · Answer

A 87.6% probability of a rate cut sounds impressive, but when it comes to execution, it&#39;s a different story. I don&#39;t believe it anyway.

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With such a big divergence expected next year, to put it bluntly, no one knows how the economy will really be; everyone is just gambling.

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Soft landing? Uh, I think the possibility of a hard landing is being underestimated.

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Inflation data and employment reports are the real definitive factors; previous predictions were all just fluff.

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Every time the market is so confident, but aren&#39;t there plenty of times it ends up being wrong? It&#39;s just annoying to watch.

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A 25 basis point cut vs. a 50 basis point cut, is the difference really that significant? In the end, tokens still fall.

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Ease, ease; shouting about easing every day, I&#39;ve long since become numb to it.

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Wait, 12.4% insist on staying put, do these people know something we don&#39;t?

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The proportions are divided so finely, but the real trading data may be completely the opposite, with plenty of arbitrage opportunities in between.