Financial Market Observation Data Suggests Next Year’s Interest Rate Scenario

According to the latest reports from Kitco, CME’s Federal Reserve Trend Monitoring Tool is signaling an interesting indication. Market participants’ views suggest that by January next year, the likelihood of the U.S. financial authorities cutting interest rates by 25 basis points is limited, standing at only 18.8%. In contrast, the dominant scenario is to keep the current interest rate unchanged, with an 81.2% probability assigned.

Looking further ahead to March, market expectations begin to incorporate a variety of developments. The forecast that a total interest rate cut of 25 basis points will be realized is supported by nearly half of participants, at 46.9%. Meanwhile, the scenario of maintaining the current interest rate remains plausible, with a 44.7% probability. Additionally, a more aggressive easing scenario, involving a total cut of 50 basis points, is a minority case, with an 8.5% chance.

From these data distributions, it can be inferred that the market remains cautious about a policy shift early next year, while a gradual adjustment toward spring is gaining momentum. As interest rate adjustments become more precise, measured in basis points, market participants are expected to become even more vigilant.