Rate-Hike Odds Fall as Strait of Hormuz Deal Nears and Oil Prices Tumble
The Federal Reserve's rate-hike probability has declined to 58.4%, according to CME FedWatch, while the probability of keeping rates unchanged in September has risen to 41.6%. Markets are digesting Chair Warsh's reaffirmation of the 2% inflation target and associated policy-path uncertainty.
US Treasury Secretary Bessent stated that a deal regarding the Strait of Hormuz could be reached on August 4 or 5, which could further compress the crude risk premium. Brent crude has fallen back below $80 as markets price in the prospect of the strait reopening.
The White House voluntary AI safety-testing framework defines 'covered frontier models' as closed-source models with advanced capabilities that pose national-security risks; open-source models are excluded. Details of the framework are not planned for public release.