Afford Anything · Friday, July 3, 2026
The recent weak job numbers are decreasing the probability that the Federal Reserve will raise interest rates. Investors are now pricing in an 80% chance that rates will remain steady at the next meeting, a shift from previous expectations.
“Between both reports, we're seeing signs that the labor market is cooling off. It's soft data all around.”
“So the question becomes, how will that affect what the Fed does? And the answer likely is that the Fed is less likely to raise interest rates.”
“So, at the moment, investors are pricing in a less than 20% probability that the Fed will raise rates at their next meeting.”
“Said another way, investors are pricing in an 80% probability that the Fed is going to hold interest rates steady, which currently is at a target range of between 3.5% and 3.75% for the overnight federal funds rate.”