Overview

• Futures and FedWatch place the odds of a 25‑basis‑point cut above 90%, with a small chance of a larger move, after weak August hiring and rising jobless claims.
• August CPI rose to 2.9% year over year with core at 3.1%, keeping inflation sticky even as a sweeping BLS revision showed 911,000 fewer jobs over the past year and unemployment at the highest since 2021.
• Stocks hover near record highs and Treasury yields have eased on bets for multiple cuts into 2026, raising the risk of volatility if the Fed signals a slower path in its dot plot or Powell’s remarks.
• Analysts expect a non‑unanimous decision, with some policymakers seen favoring a larger cut and others open to holding steady, putting unusual focus on potential dissents.
• Governance tensions persist as a court order lets Governor Lisa Cook keep working pending her case and the Justice Department seeks an emergency appeal, while nominee Stephen Miran advances and independence concerns intensify; mortgage rates could drift lower depending on 10‑year yields.