Organization: The upcoming interest rate decision by the Federal Reserve is not as clear as market pricing suggests

On December 13, LBBW analyst Elmar Voelker stated in a report that the interest rate decision at next week's Federal Reserve meeting is not as clear as forward rates suggest. "In our view, the recently announced U.S. macroeconomic data does not provide a clear template for the upcoming interest rate decision," said this senior fixed income analyst. Voelker said that from the perspective of bond market participants, there is no significant difference between "a rate cut in December and implying a pause in January" and "a pause in December and implying a rate cut in January". Data from LSEG shows that the money market believes there is a 94% chance of the Fed cutting rates by 25 basis points next week, while maintaining unchanged rates has only a 6% probability.