Last week, the Federal Reserve (Fed) decided to lower interest rates by 50 basis points (bps), bringing the rate to a range of 4.75%-5.0%. Additionally, the economic forecast known as the Dot Plot predicted that the Fed would further cut interest rates by 150 bps this year.

Following the latest meeting, several Fed officials expressed their strong support for the rate cuts, with the exception of Michelle Bowman, who opposed the 50 bps cut and instead advocated for a more modest 25 bps reduction.

Currently, investors are evaluating the likelihood of the Fed cutting rates by another 50 bps in November, with a probability of 61%, according to the FedWatch tool. For the next two meetings, there is an indication that there is over an 80% chance the Fed will reduce rates by 75 bps or more.

Source: Fxstreet