The Fed Is Now More Likely to Cut Interest Rates Than Raise Them
Wall Street is betting Brexit will change the minds of raising interest rates in the next meeting.
The probability of a federal funds rate hike at the Fed’s next three monthly meetings has collapsed to 0%, and traders are assigning a less than 8% chance of a rate increase at all this year. Earlier in June, Fed policymakers had indicated that they expected to raise rates twice this year, following their last increase in late 2015. That’s because the risks surrounding Brexit are greater than what they were during the financial crisis because of the high level of uncertainty surrounding Britain’s future.