Overview

• Traders assign a near‑certain probability to a 25‑basis‑point cut to 4.00%–4.25%, with only a small chance of a larger move, according to CME FedWatch.
• The Fed will release new economic projections, and major banks including Morgan Stanley and Deutsche Bank now forecast three quarter‑point cuts in September, October, and December.
• Labor data have deteriorated, with just 22,000 jobs added in August, unemployment at 4.3%, and a 911,000 downward revision to prior job gains alongside jobless claims rising to 263,000.
• Inflation remains above target, with CPI up 2.9% year over year in August and core at 3.1%, while headline PPI dipped 0.1% as some components kept pressure on prices.
• Fed divisions and potential dissents are in focus as Lisa Cook contests her firing and Stephen Miran awaits possible confirmation, while China’s PBOC signals it may not immediately follow a U.S. cut.