Breaking: September Fed Rate Cut Odds Soar to 78.5% Following Soft U.S. Jobs Data

The Federal Reserve’s September interest rate decision has reached a critical juncture, with an 78.5% probability of a 25-basis-point rate cut following the lackluster July nonfarm payroll report.

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Will the Fed Lower Interest Rates in September?

Following the US Fed’s recent decision in July to hold the interest rate unchanged at 4.25% to 4.5%, all eyes are on the central bank’s move in September. With job creation figures consistently falling short of estimates, traders are betting on a swift response from the Fed to address the emerging weakness. According to CME Group’s Fed futures, there’s currently a higher chance of a 25-basis-point cut. Drawing insights from the CME Group’s Fed futures data, the crypto community across the X platform remains hopeful about the higher possibility of a potential rate cut next month, driven by the weak nonfarm payroll data.

Interestingly, the interest rate cut odds stood at 89.1% earlier today, indicating a high likelihood of a rate cut. However, the probability of a September 2025 Fed rate cut has eased to 78.5%, scaling back the recent surge. Conversely, the likelihood of the Fed maintaining current interest rates stands at just 21.5%.

Source: CME Group; Fed Interest Cut OddsDespite today’s decline, the current odds of a rate cut still far exceed the 39% probability seen just last week, as CoinGape reported. The probability of the Fed keeping interest rates unchanged at the September FOMC meeting stood at a higher 60.8%.

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Half-Point Rate Cut on the Horizon?

While the CME Group’s FedWatch tool predicts that the 25-basis-point cut is likely, BlackRock CIO Rick Rieder asserts that a potential 50-basis-point interest rate cut in September is possible. As CoinGape reported on August 1, the US Bureau of Labor Statistics reported that nonfarm payrolls increased by 73,000 in July, much below the expected 147,000.

Rieder believes that the US Fed will ease monetary policy by the end of 2025. He predicts two to three rate cuts in 2025 in response to inflationary pressures and consumer spending trends. This forecast aligns with BlackRock’s institutional market outlook, which anticipates a resumption of rate cuts in the fourth quarter. The expectation is that the Fed will adopt a more accommodative stance, prioritizing economic growth and maximum employment.

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