The U.S. B2 bomber targets Iran's "nuclear enrichment capability," traders focus on The Federal Reserve (FED) rate cut in July.

Gate News bot news, as global attention follows the escalating conflict between the US's involvement in Israel and Iran, the possibility of the Federal Reserve lowering interest rates by 25 basis points in July has risen by one percentage point to 15.5%.

Just two days ago, after the latest meeting of the Federal Open Market Committee (FOMC), the probability was as high as 14.5%. However, after U.S. President Donald Trump revealed that U.S. B2 bombers were targeting Iran's "nuclear enrichment capabilities," market sentiment changed.

According to the CME Group's "Fed Watch" tool — which measures market sentiment regarding potential adjustments to the federal funds target rate — expectations for a 25 basis point rate cut have since risen to 15.5%. The likelihood of rates remaining stable is currently at 84.5%.

In other words, the market is beginning to digest the possibility that The Federal Reserve (FED) may choose to lower borrowing costs in July. The probability for the FOMC meeting in September is even higher, with the market pricing in a 57.6% chance of a 25 basis point rate cut by the FED. The likelihood of a further reduction of 50 basis points is 12.3%, while the chance of keeping rates unchanged is 30.1%.

Looking ahead to December, the futures market shows that the possibility of the federal funds rate remaining in the current range of 425-450 basis points is only 4.2%. The probability of a reduction to the range of 400-425 basis points is 22.8%, while the likelihood of a reduction to the range of 375-400 basis points is 41.1%. Meanwhile, the prediction platform Polymarket forecasts that the probability of a 25 basis point rate cut in July is only 13%, while the market expects an 87% chance of no adjustment.