With the 10-year US Treasury bond yield extending its slide after touching the lowest level since November 2016 yesterday and escalating fears over a long-lasting trade war between the United States and China weighing on the market sentiment, markets now see one more 25 basis points rate cut in September as certain.
According to the CME Group FedWatch Tool, the probability of a September cut, which dropped below 50% earlier this week following Chairman Powell’s neutral comments on the policy outlook, is now at 98%.
Heightened odds of a rate cut in September seems to be hurting the Greenback. As of writing, the US Dollar Index was down 0.22% on the day at 98.18.
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