CME Group FedWatch September hike probability virtually unchanged after FOMC minutes

CME Group FedWatch tool, which calculates unconditional probabilities of Federal Open Market Committee (FOMC) meeting outcomes to generate a binary probability tree, shows the probability of a rate hike on September 20 FOMC meeting increased to 18.4% from 18% in the pervious day, reflecting the muted market reaction to the FOMC meeting minutes.

The minutes from the June (13rd & 14th) Federal Reserve’s monetary policy meeting didn't offer anything new nor surprising to investors as it showed that several Fed policymakers were concerned inflation softness might persist due to limited pass-through from resource utilization but almost all of them supported the rate hike decision. Moreover, the statement didn't reveal a clear timeline for the start of the reinvestment strategy either, making it difficult for markets to act on uncertain expectation.

• FOMC Minutes: Policymakers saw recent increase in import prices as consistent with inflation trend in medium term