CME's FedWatch tool points to a slashing of interest rates in October 2025

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It seems that something interesting is unfolding on the monetary horizon. The CME's 'FedWatch' tool revealed data that shook market expectations. Zero chance. That's right. 0% probability of the Fed holding current rates in October 2025.

So what's coming up then? A 25 basis point cut emerges with impressive strength: 88.3% probability. Meanwhile, a more aggressive reduction of 50 basis points appears with 11.7%. It's curious how cuts weren't even mentioned before.

November brings another scenario. Unchanged rates? Almost impossible - only a 0.4% chance. A cumulative cut of 25 points seems reasonable with 36.2%. But most bets are on a total cut of 50 points - 63.4%.

The Fed is likely to adjust rates soon. It's a shift in monetary policy, somewhat surprising to some analysts. This change is expected to shake up economic growth. Investors are already rethinking strategies.

The forecasts come from probabilistic models based on empirical data. It is not entirely clear how everything will unfold, but statistics give us clues about the trends in the economy and monetary policy that are coming.

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