Fed Rate Hike Probability Jumps to 25% for July Meeting
Markets now see a 25% chance the Federal Reserve will raise interest rates at its July 29 meeting, a sharp reversal from earlier expectations of two rate cuts by that date.
A dramatic shift in market pricing now assigns a 25% probability that the Federal Reserve will hike interest rates at the July 29, 2026 meeting. This marks a complete reversal from the start of the year, when traders were pricing in two quarter-point cuts by July.
The change reflects a renewed "higher for longer" narrative as inflation and economic data continue to surprise to the upside. The hawkish repricing has caught many investors off guard, underscoring the volatile path of monetary policy expectations.
This is the latest in a series of rapid adjustments to Fed rate forecasts, with markets now fully abandoning the cuts that seemed assured just months ago.
Source: The Kobeissi Letter