Market sentiment leans heavily towards a rate cut by the Federal Reserve this year, with traders predicting a 45.8% probability of such a move in December. This shift in expectation is driven by easing inflation and weakening economic indicators. While interest rates have remained steady throughout 2023, the Fed’s focus remains on taming inflation while avoiding a negative impact on the economy. However, recent data suggests cooling inflation and declining wage pressures are encouraging investors to anticipate a potential policy change soon. This is in line with the Fed’s ‘data-dependent’ approach, where future decisions hinge upon upcoming economic indicators like November’s inflation and employment reports.