Fed Rate Cut Expected in September: CME FedWatch Tool Predicts Potential Policy Shift

Market expectations point to a potential shift in the Federal Reserve’s monetary policy stance with an anticipated rate cut in September, as indicated by the CME FedWatch Tool. The tool currently projects a 15.4% likelihood of maintaining current interest rates, while there is an 84.6% chance of a 25 basis point reduction. Looking ahead to October, chances of no change in rates are lowered to 6%, with a higher probability of 25 basis points (42.4%) or 50 basis points (51.5%) cuts.