Will the Fed Cut Interest Rates in September? Market Bets on 0.25% Movement

Market anticipation for a potential rate cut by the Federal Reserve is at an all-time high, with CME’s FedWatch Tool indicating an 86.4% probability of such a move in September. This translates to a 13.6% chance that rates will remain unchanged. Based on current projections, a quarter-point reduction could bring the federal funds rate target range down to 4.00%-4.25%. A larger 0.5 point cut is currently considered unlikely.