Market Bets on Fed Rate Cuts Surge to Over 90% for September
Traders are pricing in near-certainty of a Federal Reserve rate cut in September, with CME FedWatch Tool showing probabilities oscillating between 88% and 94%. This follows weak job data, political pressures, and dovish signals from policymakers.
The outlook for 2025 has shifted dramatically, with odds of three rate cuts next year jumping from 20% to 50% within a week. San Francisco Fed President Mary Daly maintains two cuts remain appropriate this year, but acknowledges flexibility if labor markets deteriorate further.
Goldman Sachs revised its forecast to project three 25-basis-point cuts in 2025, likely beginning in September. Market liquidity expectations are rising alongside these projections, creating favorable conditions for risk assets.
