CME FedWatch shows 82.6% chance of 25 basis point rate cut in September

The CME FedWatch tool indicates a growing likelihood of a Federal Reserve rate cut in September, with a 25-basis-point reduction now seen as having an 82.6% probability, a sharp rise from the 41.3% level observed prior to the latest U.S. nonfarm payroll data [1]. This shift reflects market reactions to recent economic signals, including a disappointing July nonfarm payroll increase of only 73,000 jobs, which was significantly below expectations and followed downward revisions for May and June. These developments have intensified speculation about Fed policy easing [1].

Alongside the September meeting, the October 29 FOMC meeting is also in focus, with a cumulative probability of 33.1% for a 25-basis-point cut and 62.7% for a 50-basis-point cut across the two sessions [1]. Fed Governor Randal Quarles is set to resign this week, which could allow President Trump to appoint a new official earlier than planned. The timing of the resignation, coupled with weaker employment data, appears to have contributed to the heightened expectations of a September rate cut [1].

The CME FedWatch probabilities continue to serve as a key market indicator for gauging expectations of central bank policy moves. The sharp increase in the probability of a rate cut highlights the sensitivity of financial markets to both economic data and changes in Fed leadership. Investors are closely monitoring the next FOMC meeting on September 17 for further guidance on the central bank’s stance.

Source: [1] CME FedWatch: 82.6% Probability of 25 Basis Point Rate Cut in September (https://www.theblockbeats.info/en/flash/305763)