ING analysts see a 60% chance the Federal Reserve holds rates steady next week, citing cooler inflation and economic risks outside tech.
The Federal Reserve’s upcoming rate decision is finely balanced, with a 60% probability of no change at the next FOMC meeting, according to market analysts. Cooler June inflation data and reduced geopolitical tensions with Iran support a hold, though a 25-basis-point hike remains a non-negligible risk.
Recent inflation readings have eased, and inflation expectations appear tame, reducing pressure for immediate tightening. However, the yield curve’s structure—particularly the rich 5-year tenor—suggests any hikes would likely be reversed within a year, leaving rates lower than current levels.
Analysts note that while a protective hike is possible if inflation concerns resurface, the Fed’s path remains uncertain. Markets have priced in a potential shift, but the decision could surprise observers expecting a pause.