September Fed Rate Cut Odds Jump to 91.4% as Economic Signs Worsen

Generated by AI AgentCoin World
Friday, Aug 8, 2025 6:03 am ET1min read
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Aime RobotAime Summary

- Market now prices 91.4% chance of Fed rate cut in September amid slowing growth and easing inflation.

- Weak labor data and declining consumer activity reinforce expectations for monetary policy easing.

- Bond yields fall while cryptocurrencies rally as investors anticipate cheaper borrowing and liquidity.

- Fed retains option to delay action based on incoming data, with final decision pending September FOMC meeting.

The market is increasingly pricing in an imminent U.S. Federal Reserve rate cut, with the probability of such a move in September now standing at 91.4%. This sharp rise in expectations reflects a growing consensus among investors that the Fed is likely to ease monetary policy in response to slowing economic growth and moderating inflation [1].

The shift in market sentiment is supported by a series of recent economic reports showing weaker labor market momentum and declining consumer activity. These trends have raised concerns about the pace of economic expansion, particularly in the context of a global economic slowdown. At the same time, inflation has continued to ease, moving closer to the Fed’s long-standing 2% target, which has traditionally signaled room for accommodative policy [1].

In response to these developments, the bond market has already begun adjusting, with yields falling as investors lock in expectations for lower interest rates. The move has also spurred a rally in risk assets, with cryptocurrencies and equities seeing increased demand.

Bitcoin
and other major digital assets, for instance, have experienced a measurable price lift as traders anticipate cheaper borrowing costs and greater liquidity in financial markets [1].

Despite the high probability of a rate cut, analysts caution that the Fed retains the option to delay action should incoming economic data show signs of unexpected resilience. The next key event will be the Federal Open Market Committee (FOMC) meeting in September, where policymakers will decide whether to adjust interest rates. Until that decision is made, market positioning remains firmly aligned with the expectation of a cut [1].

The rising 91.4% probability underscores the Fed’s growing inclination to support economic activity amid persistent macroeconomic headwinds. As markets continue to adjust to the likelihood of looser monetary policy, investors are shifting capital toward higher-yielding and growth-oriented assets in anticipation of a more accommodative environment [1].

Sources:

[1] "Rate Cut Odds Hit 91.4% for September," https://coinmarketcap.com/community/articles/6895c842cb59d57bc2a177ff/