CME FedWatch Tool shows 81% chance of a 25 bps rate cut next week after GDP data

According to the CME Group's FedWatch Tool, the probability of the Federal Reserve cutting the policy rate by 25 basis points is now 80.6%, slightly lower than the 81.2% seen yesterday, suggesting that today's GDP data had little to no impact on rate cut expectations.

In its first estimate, the US Bureau of Economic Analysis reported that the real economy expanded by 2.1% on a yearly basis in the second quarter following the 3.1% growth recorded in the first quarter. This reading, however, came above analysts' estimate of 1.8%.

In the meantime, the US Dollar Index is now at its highest level in eight weeks near the 98 mark.