Traders are currently divided on the size of the impending rate cut, which could lead to increased volatility in financial markets following Wednesday’s rate decision. At this time, Fed funds futures are indicating a 50% chance of the Fed reducing rates by 25 basis points (bps) to the 5%-5.25% range. Simultaneously, there is a similar probability of a larger 50 bps rate cut to the 4.7%-5% range. This uncertainty is setting the stage for potential market fluctuations in the near future.
