The chart of the week studies the likelihood of changes in the Federal Funds rate over the next year. The forthcoming Fed meeting is set for July 31st, and the market anticipates that rates will remain unchanged. There is no meeting scheduled for August, but for the September meeting, the market is indicating a 73.6% probability of a 25 basis point rate reduction. The expectations persist for rate cuts in the following months, with the current projections suggesting a total of 1.25% in rate cuts over the next 12 months. It will be interesting to see how the Fed responds, given that late last year, there were expectations for 5 rate cuts in 2024, none of which have occurred yet.

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