🏦📊Market Prices In 90% Chance Fed Delivers 75Bps Of Rate Cuts Into December: Cable FX Macro

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• Probability of a 25 bp cut (to 4.00%-4.25%): Approximately 90%. This would bring the rate to its lowest level since early 2024.

  Probability of a 50 bp cut (to 3.75%-4.00%): Around 10%. This more aggressive move is seen as less likely but could gain traction if incoming data (e.g., further labor market softening or tariff-induced inflation spikes) surprises to the downside.

  Probability of no change: Less than 5%, down from over 50% just weeks ago before the August jobs data.

• Market prices in 90% chance the Fed delivers three 25 bps reductions (75 bp total), up from expectations of two cuts just a month ago. This would lower the fed funds rate to around 3.50%-3.75% by December 2025.

• Into 2026, we will get a colour of Fed staff thinking as the FOMC delivers its SEP on Wednesday. Read our Fed preview in the Risk In The Week report.