Traders Bet Against Fed Rate Cut At June FOMC Meeting
Highlights
- Traders are increasing the size of their bets against a Fed interest rate cut.
- Fresh data indicates that there is a 0.1% chance of rate cuts at the next FOMC meeting.
- However, pressure is piling of the Federal Reserve to cut rates following the ECB's decision to taper its interest rates.
- Cryptocurrency prices are rallying despite slim odds for rate cuts.
The cautious stance of the Federal Reserve on interest rates has seen the probability for a rate cut tumble to a mere 0.1%. As the June FOMC meeting inches closer, traders are expecting rates to remain steady between 425 and 450 bps, but incoming economic data may sway sentiments. Cryptocurrency prices are rallying despite the low chances for a rate cut, braving analysts’ expectation.
Chances of A Fed Rate Cut Crash To 0.1% At FOMC Meeting
According to CME FedWatch Data, the odds for the US Federal Reserve to cut interest rate to a 400-425 basis points sits at a grim 0.1%. Per the data, there is widespread enthusiasm that the Fed will keep rates between the 425-450 bps after the June 18 FOMC meeting.
Polymarket, the world’s largest prediction market, has similar odds for a Fed rate cut at the next FOMC meeting. In the lead up to May’s FOMC meeting, the probability for a rate cut to 400-425 bps stood at 9%. However, with barely nine days till the next FOMC meeting, the odds have become even grimmer, dousing enthusiasm for a Fed rate cut.
Optimism for a Fed rate cut took a nosedive after the recent US job data showed resilient labor demand. Furthermore, with inflation rates remaining above the Fed’s benchmark, the chances of a Fed rate cut remain slim. Investors have their eyes on the incoming US CPI figures to gauge the Fed’s stance on a potential rate cut.
Apart from the jobs and inflation data, the Fed FOMC meeting minutes reveal a cautious stance toward cuts, citing macroeconomic issues. Powell has his eyes on the impact of Trump tariffs on US economic indices, opting for a wait-and-see approach.
Calls For Interest Rate Cuts Reach Deafening Levels
Despite the odds against a rate cut, the calls for the Fed to reduce interest rates have reached a fervent pitch. After the ECB cut its rates by 25 bps, several opinion leaders have lent their voices to the call for Fed rate cuts.
US President Donald Trump has backed a 100bps Fed rate cut ahead of June’s FOMC meeting, describing the move as rocket fuel for economic growth. Alongside the push for a full-point cut, Trump hurled a flurry of criticisms at Fed Chair Jerome Powell, describing him as a disaster.
President Trump has hinted at the announcement of a new Fed Chair in the near future. Consequently, Polymarket data is tipping former member of the Federal Reserve Board of Governors Kevin Warsh as the most likely successor for Jerome Powell.
Ahead of the FOMC meeting, cryptocurrency prices are rallying, led by Bitcoin and Ethereum, with the global market capitalization adding over $100 billion over the last day.
- VanEck Registers Lido Staked Ethereum Trust in Delaware, LDO Up 7%
- Fed’s Lorie Logan Urges Caution on Further Rate Cuts Citing Inflation Risks
- Nasdaq-Listed Fitell Adds Pump.fun’s PUMP To Supplement Solana Treasury
- FG Nexus to Tokenize Stock on Ethereum as SEC Weighs 24/7 Onchain Stock Trading
- Bitcoin Still Undervalued, JPMorgan Forecasts Rally to $165,000
- Pi Network Price at Risk of Another Crash as Mysterious Whale Stops Buying
- Solana Price Eyes $360 After Bullish Retest As VisionSys AI Deploys $2B Treasury Strategy
- Cardano Price Forecast As Hashdex Listing Fuels Optimism For $1.27 Breakout
- BONK Price Rally Ahead? Open Interest Jumps as TD Buy Signal Flashes
- Shiba Inu Price to Surge as Whales Buy and Team Commits to Shibarium Growth
- XRP Price Prediction After Ripple CTO David Schwartz Resigns
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
