The Fed Highly Likely to Restart Rate Cuts Tomorrow Morning – How Many Times Will It Cut Rates Within the Year?

After a one-year interval, markets are betting on the Fed restarting interest rate cuts.

At 2:00 AM Beijing time on September 18, the market will await the outcome of the Fed's September FOMC meeting. As of press time, data from CME Group shows a 96.1% probability of a 25-basis-point rate cut and a 3.9% probability of a 50-basis-point cut at this meeting.

A year ago, in September 2024, the Fed initiated its first rate cut in over four years but paused after cutting rates by 100 basis points. The sustainability of the current market bet on the Fed restarting rate cuts remains uncertain.

This meeting will also release the latest Summary of Economic Projections (SEP) and the dot plot. Interviewed experts believe the information revealed by this dot plot may be more "dovish." "Dovish" refers to a more accommodative monetary policy, implying expectations for larger Fed rate cuts.

The "politicization" of the Fed is also drawing attention. Interviewed experts noted that, in the long run, the direction of the Fed's monetary policy might be influenced by the new Fed Chair, but its actions will still be constrained by the Fed's framework.