Fed's October rate hike probability drops to 17%

Odaily reports that the nonfarm payroll data further reinforced the view that momentum in the U.S. job market is cooling. According to CME's "FedWatch" tool, traders now expect an 83% probability that the Federal Reserve will keep rates unchanged at its October meeting, up from 72% before the jobs report was released; the probability of a rate hike has dropped from 28% to 17%. Rate expectations have also cooled. Currently, federal funds rate futures pricing shows that the market expects the Fed to raise rates by a cumulative total of about 22.2 basis points through the end of 2026, down from 25.5 basis points before the data was released.