Fed Rate Cut Likely in September, CME FedWatch Shows 85–87% Probability
As the Federal Reserve’s September meeting approaches, market expectations for an interest rate cut have surged. According to the CME FedWatch Tool, there is now an 85 to 87 percent chance that the Federal Reserve Board will cut interest rates at the conclusion of the meeting.
This represents a significant shift in sentiment from earlier in the year, when expectations were mixed and the Fed signaled a cautious approach.
“The Federal Reserve has been reluctant to reduce rates.”
At the beginning of 2025, many economists and investors anticipated at least one rate cut by midyear, with the potential for two or three more before year’s end. However, persistent inflation concerns and a strong labor market led the Fed to hold rates steady longer than expected.
“Many thought when the year began there would be at least one by now, and maybe two or three more by the end of the year.”
Now, analysts from Bottom Line are raising concerns not just about the pace of rate cuts, but the decision-making framework behind them. They argue that the Fed may be overly influenced by academic theory rather than the practical realities facing American businesses.
“Bottom Line analysts are of the opinion that the Fed relies too heavily on input from academia in its decision-making process and not enough input from people who actually run businesses, make payroll, and answer to investors. Both opinions are important in our view in developing any economic policy.”
This criticism touches on a long-standing debate: Should central banks focus more on real-world business challenges when crafting monetary policy?
With economic growth cooling and inflation showing signs of stabilizing, the Fed may now feel more comfortable easing rates to support borrowing and investment. However, businesses, investors, and households alike will be watching closely to see whether this policy shift is timely—or too late.
As September’s decision nears, the market consensus is strong. But as history has shown, the Federal Reserve’s decisions often carry surprises—and spark debate on how best to balance academic models with real-world business insight.
Audio Reporting by Mark Oppold for Southeast AgNet.