CME FedWatch: 84.1% Probability of Fed Rate Cut in September
According to CME’s FedWatch tool, the probability of a 25bp rate cut by the US Federal Reserve at its September meeting stands at 84.1%, while the chance of holding rates steady is 15.9%. For October, the probability of a cumulative 25bp cut is 48.4%, a 50bp cut is 44.1%, and only 7.6% for no change. This elevated rate cut probability may boost risk assets by easing monetary policy expectations and could be bullish for the cryptocurrency market.
Bullish
The high probability of a Fed rate cut increases market liquidity and lowers borrowing costs, typically uplifting risk assets including cryptocurrencies. Historically, similar shifts in rate cut probability—such as in mid-2020 when Fed cuts fueled a major crypto rally—have led to strong short-term gains. In the short term, crypto traders may respond with buying pressure as easing expectations build. Over the long term, sustained monetary easing can support higher valuations, but traders should monitor inflation data and Fed communication for potential reversals.