In the wake of the July inflation report,
which showed U.S. consumer prices rising by 0.2% month-on-month and 2.7% year-on-year,
and the core consumer price index increasing by 0.3% month-on-month and 3.1% year-on-year,
traders sharply increased their bets on a Federal Reserve interest rate cut in September.
According to CME data, the probability of a 25 basis point rate cut now stands at 80%,
while only 14% expect the Fed to keep rates unchanged,
and 6% expect a rate cut of more than 25 basis points.