According to CME's FedWatch tool data, the probability of a Fed rate reduction in September reached 86.4%.
In contrast, the probability of remaining interest rates at current levels was calculated as 13.6%.
The current target range for federal fund rates is between 4.25% and 4.50%. Data suggests that the 25 basis point reduction will likely bring prices back to 4.00% and 4.25%.
Currently, a 50 basis point cut is not considered a possibility.
Comparisons from previous periods show that interest rate cuts are steadily increasing. A week ago, the chances of interest rate reduction were 84.7%, but a month ago it was 46.7%. Conversely, the probability of a rate reduction remaining at the current level was 52.4%, but today it has dropped to 13.6%.
The next Fed meeting is about 17 days away, with the market selling a large price for interest rate reductions.
US President Donald Trump is putting great pressure on Federal Reserve Chairman Jerome Powell to cut interest rates. Trump even considered firing Powell. However, Powell is not just a decision to cut interest rates. They will be made through voting held within the Fed. Fed member Lisa Cook was recently rejected by Trump for his mortgage fraud allegation, but Cook has since filed a lawsuit over the decision.
*This is not investment advice.
