Rates traders still see an FOMC July rate hike but chance of a September hike has plunged

<p>The US June CPI report continued to show improvement, the pace of price prises slowing again:</p><p>The US CPI report for June came in lower than the consensus expected for both headline and core m/m.</p><ul><li><a href="https://www.forexlive.com/news/us-june-cpi-yy-30-versus-31-expected-20230712/" target="_self" rel="follow">US June CPI y/y 3.0% versus 3.1% expected</a></li></ul><ul><li><a href="https://www.forexlive.com/centralbank/goldman-sachs-response-to-the-us-cpi-report-affirms-a-final-fomc-rate-hike-july-20230712/" target="_self" rel="follow">Goldman Sachs response to the US CPI report – affirms a final FOMC rate hike July</a></li><li><a href="https://www.forexlive.com/centralbank/jp-morgan-response-to-the-us-june-cpi-report-soft-landing-path-a-smidgeon-wider-20230712/" target="_self" rel="follow">JP Morgan response to the US June CPI report – soft landing path a "smidgeon" wider</a></li></ul><p>The CME FedWatch Tool still shows a 94% chance of a Fed Funds rate hike of 25bp at the July 26 meeting. </p><p>This is based on the probabilities of changes to the Fed Funds rate and U.S. monetary policy, as implied by 30-Day Fed Funds futures pricing data.</p><p>That pricing data for the September meeting, though, has plunged. Last week is was around 18%, and earlier this week circa 22%. Its lower now, circa 13%:</p>

This article was written by Eamonn Sheridan at www.forexlive.com.