Investors Are Sure the Fed Will Hold Rates Steady as Meeting Kicks Off

Investors are all but certain that the Federal Reserve will hold interest rates steady tomorrow—but what the central bank does later this year is still anyone's guess.

The market is pricing in a 99.9% chance that policymakers hold borrowing costs at their current level, according to the CME FedWatch tool. After that, the picture gets foggier, with traders predicting anything from zero to four quarter-point cuts by the end of 2025.

Even if another rate pause looks like a done deal, Chair Jerome Powell's press conference will be of interest for the market. Investors will be keeping an eye on his comments on inflation and the labor market, even if the Israel-Iran conflict has made the Fed feel like a secondary issue over the past few days.