Probability of 50bps Fed rate cut in September jump
The likelihood of a larger 50 basis point rate cut from the U.S. Federal Reserve in September has seen a notable increase in recent days, according to data from the CME Group 30-Day Fed Fund futures. The probability of a decrease in the target rate from the current 5.25 - 5.50% rate to 4.75 - 5.00% now stands at 48%, a notable rise from the previous day's probability of 42% and last week's probability of just 36%.
Meanwhile, the potential for a 25 bps decrease from the current rate has decreased. The current probability for 25 bps cut now stands at 52%, a decrease from the previous day's 58% and last week's 64%. Overall, traders expect a 100% chance of a September rate, with the two potential outcomes - 25bps or 50bps - now essentially neck and neck.
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