Traders are certain at this point that by September, the Federal Reserve will be cutting interest rates.
The CME FedWatch tool stated that the odds of the Fed's target range for the federal funds rate being lowered by 0.25% in September, from the current 5.25% to 5.50% to 5% to 5.25%, are 93.3%. The odds that the rate will be lowered by a half percentage point are 6.7%, accounting for traders who believe the central bank will cut rates at both the July and September meetings. Combined, these percentages yield 100% odds.
