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Fed Watch Traders Expect 25 Bps Rate Cut in September

Fed Watch: Traders Expect 25 bps Rate Cut in September

On Wednesday, traders kept bets the Federal Reserve will start dialing back on restrictive policy in September, starting with a 25 basis-point interest-rate cut at that month’s meeting and delivering two more like-sized rate cuts in each of November and December, after the Fed acknowledged “some further progress” towards its 2% inflation goal.

Before the Fed’s statement, released at the end of a meeting at which officials decided to hold the policy rate in the 5.25%-5.5% range, interest-rate futures contracts were pricing in an 89% chance of a 25-basis point reduction in September, with the balance of bets on a bigger 50-basis point cut. Rate futures prices now reflect a 95% chance the first rate cut will be 25 basis points.

(Source: Reuters)

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Jennifer Tacker
Jennifer Tacker is a staff writer at ABBO News. She holds a B.A. from the University of Waterloo and a B.Ed from Western University. Jennifer has been active in the stock market and crypto sector for a decade. She specializes in technical analysis and trading strategies.