5 months ago
Markets Now Expect a Double Rate Cut in September. Be Careful What You Wish For.
With markets now concerned about economic growth, the odds of a double rate cut in September just spiked.
Fed-funds futures now see a 71.5% chance of a 50 basis point cut at the Federal Open Market Committee's September meeting, according to the CME FedWatch Tool. That's up from 11.5% a week ago and 22% prior to the report. The odds of a 25 basis point cut are down to 28.5% from 78%.
Through the end of the year, markets are pricing in a 10.5% chance of 75 basis points in cuts, a 41.4% chance of 100 basis points in cuts, and a 40.5% chance of 125 basis points in cuts. The odds of 150 basis points in cuts were up to 7.6% from zero on Thursday.