Citigroup’s short-term rates trading desk is betting that the Federal Reserve will hold rates steady at its July 28-29 FOMC meeting. The federal funds target rate has remained at 3.50%-3.75% since the Fed’s June decision. Swap markets are pricing in roughly a 33% probability of a 25 basis point rate hike, while the broader market consensus places this probability between 70% and 80%. Under new Fed Chair Kevin Warsh, the central bank has removed its easing bias, and nine out of 18 FOMC officials project at least one rate increase by the end of 2026.
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