The market is starting to anticipate a 50 basis point rate cut by the Federal Reserve in September
The market is increasing its bets on the Fed cutting interest rates, with the 2-year Treasury yield falling to its lowest level. Interest rate futures indicate that the market expects the Fed to cut rates by 87 basis points this year. The probability of a 50 basis point rate cut by the Fed in September has risen to 33%
FXStreet News on August 2nd: Due to concerns about a potential economic recession in the United States, market expectations for a rate cut by the Federal Reserve have increased. The yield on the 2-year US Treasury bond continued its overnight decline, falling to 4.11% in the early Asian session, the lowest level since May 2023. As of the time of publication, interest rate futures indicate an 87 basis point cut by the Fed within the year, with a 13 basis point probability for four rate cuts within the year. The Fed still has three more meetings this year to consider rate cuts, with the probability of a 50 basis point cut in September rising to 33%