Fed Rate Hike Odds for July Drop to 20% as Weak Jobs Data Shifts Market Expectations

According to BNP Paribas chief economist Isabella Mateos y Lago, as reported by Jin10 on July 3, short-term interest rate futures now price the probability of a Federal Reserve rate hike on July 29 at approximately 20%, down from 33% before the non-farm payroll report. The market still expects the Fed to raise rates by 25 basis points this year, but not before December at the earliest. For the European Central Bank, Mateos y Lago stated that the baseline expectation remains a rate hike in September, though ECB management council members speaking at the Sintra conference have not ruled out skipping the additional increase.
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