Traders now betting on smaller Fed rate cut in September
Investing.com -- The likelihood of a Federal Reserve interest rate cut at the September 2024 meeting is all but guaranteed. However, the question now centers around whether the Fed will cut 25 basis points or follow through with a jumbo 50 bps cut. Traders have adjusted probabilities over the last week based on new economic data points.
Overall, the data shows that while the odds were essentially even last week between the two potential cuts, traders are now mainly betting on the smaller of the two cuts. Recent economic data is driving the shifting probabilities for the September 2024 meeting. This week, both the PPI and CPI posted positive inflation readings. Meanwhile, recent stronger-than-expected retail sales data supports the view of a soft landing and a smaller cut.
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