Overview

• Odds of a September 25-basis-point cut rose after New York Fed President John Williams said every meeting is live and policy will hinge on incoming data.
• Powell’s Jackson Hole remarks on a shifting risk balance opened the door to easing, prompting major banks including Morgan Stanley to flip forecasts toward a September move with further trimming by year-end.
• Futures now price roughly 84% odds of a September cut and about 56 basis points of easing in total for 2025, pulling two-year Treasury yields to the lowest since May 1 and pressuring the dollar.
• The Fed’s focus is trained on tariff-driven price pressures and slowing labor-force growth, with Friday’s PCE report and the September 5 payrolls data seen as decisive for the September 16–17 decision.
• Political strain added uncertainty as President Trump moved to remove Governor Lisa Cook, a step Cook disputes and is challenging, raising questions about central-bank independence.