US Rates left unchanged, however rate cuts still priced into markets

The US Federal Reserve Meeting decision reached a conclusion this morning, with interest rates remaining unchanged this May.

However, based on the CME FedWatch Tool and other analyst opinions, there is currently a 42.4% probability of the first rate cut coming during the September meeting.

While the markets have gone through a readjustment period due to uncertainty of whether or not there will be the three expected rate cuts this year, or less, more can be said about futures.

Reported by Barrons, Daniel Murray, deputy chief investment officer and global head of research at EFG Asset Management wrote that “Futures are now pricing only slightly more than one rate cut this year. While it is not the central view, there is clearly also an increased probability that the Fed has to hike again."

With both US and Australian bodies keeping a tight eye on inflation and both markets waiting out for rate cuts, it is worth staying in the loop for the upcoming meetings.