There Is a 83% Chance the Federal Reserve Cuts Interest Rates in September. Doing So Would be Nearly Unprecedented.

After somewhat positive inflation data in July, the chances of the Federal Reserve cutting interest rates in September are at roughly 83%, according to CME Group's FedWatch tool calculations on Aug. 18. One month earlier, roughly 59% of traders betting on changes in the federal funds rate thought an interest rate cut would occur in September.In this market, apparently, opinions change fast. While President Donald Trump has been aggressively urging the Fed to cut rates because he thinks the economy can manage the cuts, many, including Federal Reserve Chair Jerome Powell, have opted for a wait-and-see approach, given the uncertainty of the impact of tariffs on inflation and some data indicating economic strength that would point to keeping rates where they are. Interestingly, if the Fed does cut rates in September, it would be a nearly unprecedented move, considering where the data stands.The July Consumer Price Index (CPI) report released on Aug. 12 gave investors all the confidence they needed that the Fed will cut rates in September. The CPI tracks the monthly and yearly price changes of a basket of consumer goods and is viewed as a key data point that the market uses to gauge the level of inflation.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool