According to data from CME FedWatch, the market currently prices in an 82.6% chance that the Fed will cut by 25 basis points in September, a sharp increase from 41.3% before the weak jobs data was released. There is only a 17.4% chance that interest rates will remain unchanged.
As of October, the market is pricing in:
62.7% chance of a 50 basis point cut
33.1% chance of a 25 basis point cut
4.2% chance of keeping interest rates unchanged
The increase in expectations for monetary policy easing stems from the weaker-than-expected jobs report — only 73,000 new jobs in July, along with Fed Governor Kugler's upcoming resignation, paving the way for President Trump to appoint new personnel likely to favor easing.
👉 The next FOMC meeting is scheduled for September 17.