Federal Reserve Watch: A 25 basis point rate cut in September seems to be a foregone conclusion, with at least two more cuts expected before the end of the year.
According to the latest data from CME's "Federal Reserve Watch", the probability of the Federal Reserve maintaining the interest rate at the current level (4.25%-4.50%) in September is 11.6%, while the probability of a 25 basis point rate cut (4.00%-4.25%) is 88.4%. It can be basically determined that a 25 basis point rate cut in September is almost certain.
As for October, the probability of the Federal Reserve maintaining the interest rate (4.25%-4.50%) is 4.2%, the probability of a cumulative 25 basis point cut (4.00%-4.25%) is 39.2%, and the probability of a cumulative 50 basis point cut (3.75%-4.00%) is 56.7%. It can be basically confirmed that the likelihood of no rate cut in October is extremely low.
Now let's take a look at December; the probability of a 50 basis point cut (3.75%-4.00%) is only 45.3%, the probability of a 25 basis point cut (4.00%-4.25%) is 42.7%, while the probability of maintaining the interest rate is 11.2%.
From this, it can be seen that the Federal Reserve may face at least two rate cuts before the end of the year, with each rate cut generally around 25 basis points.