On the eve of Powell's speech, traders continue to lower interest rate cut bets.
BlockBeats News, August 22nd: Forex options data shows that the bullish sentiment on the US dollar has risen to a three-week high, indicating that traders are betting that Fed Chairman Powell will not take an overly dovish stance on rate cuts.
Traders have been reducing their rate cut bets in recent days: the current market expects a cumulative 47 basis point rate cut by the Fed by the end of the year, compared to 63 basis points just over a week ago.
"A 25 basis point rate cut in September—this door will open," said Sonja Marten, Director of Forex and Monetary Policy Research at DZ Bank AG, in an interview with Bloomberg TV, "but I don't think he will take a more aggressive stance than that." (FX678)
According to CME's "FedWatch Tool," the current probability of the Fed holding rates steady in September is 24.5%, while the probability of a 25 basis point rate cut is 75.5%. The probability of the Fed holding rates steady in October is 13%, with a 51.5% probability of a cumulative 25 basis point rate cut and a 35.5% probability of a cumulative 50 basis point rate cut.
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