September 25, 2021
Nearly 50% Odds of "At Least" 3 Rate Cuts by December
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Nearly 50% Odds of "At Least" 3 Rate Cuts by December

In the last month the odds of interest rates cuts by the Fed have soared.
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In the last month the odds of interest rates cuts by the Fed have soared.

June Rate Cut Odds

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Rate cut odds from CME Fedwatch.

  • The odds of one cut in June are 44.6%.
  • The odds of two cuts are 29.3%.
  • The odds of three cuts are 5.4%

June Changing Odds

  • A month ago the the odds of No Cut in June were 63.0%.
  • Today they are only 20.7%.

December Rate Cut Odds

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December Changing Odds

  • In the past month the odds of two or more cuts jumped from 30.3% to 77.7%
  • In the past month the odds of three or more cuts jumped from 8.4% to 47.2%

What's Happening?

  1. CDC Admits Spread of Coronavirus in the US Appears Inevitable
  2. Lie of the Day: This is Not a Pandemic
  3. Bond Yields Crash and Gold Soars on Pandemic Threat
  4. Fed Minutes Highlight Coronavirus Concerns and Uncertainty 8 Times

Rate cuts odds started rising before coronavirus threat materialized on news Largest Global Shipping Decline Since 2009.

Mike "Mish" Shedlock

Rate Cut Odds Dip Below 50% from 92% a Week Ago

The market has given the Fed a free swing as rate cut odds dip to 47%.

Interesting Rate Hike Odds: March favors Hikes, December Favors Cuts

Fed fund futures show a hike in March is more likely than a cut. In December, the opposite is true.

December Rate Hike Odds Drop to 35.9%, Rate Cut Odds 2.6%: No Hike Until June 2018?

For the first time in a long time, CME Fedwatch shows the odds of a rate cut in December rose considerably above zero. Considerable means 2.6%.

July Rate Cut Odds Still 100%

Despite today's jobs report, Implied July rate cuts odds are still 100% but a second cut is now priced out.

Rate Cut Odds Soar on Weak Data

A month ago, Fed Fund Futures implied a 72.9% chance of at least one hike. They now imply a 38.9% chance of at least one

Rate Cut Odds Shrink Dramatically Following FOMC Decision

The odds the Fed Funds Rate would be 1.75% to 2.00% fell from 54.2% yesterday to 0% today.

Half-Point Rate Cut Odds Explode to 71% - So What? It Doesn't Matter!

The odds of a 50 basis point rate cut on July 31 topped the 70% mark in the wake of a dive in leading indicators.

Stocks Dive, Rate Cut Odds Soar, Trump Blames Impeachment

Global equities are under pressure amid and rate cut odds rising amid weakening economic data. Trump blames impeachment.

The Fed Will Cut Rates on March 18

It's now baked in the cake. The Fed will cut rates on March 18 and most likely at least twice more.