In recent times, the financial markets have observed a subtle shift in their expectations regarding the Federal Reserve’s (Fed) upcoming interest rate action. Based on swap contract data, the probability of the Fed cutting interest rates by 50 basis points at its next meeting has increased according to market readings. This adjustment comes amidst reports from The Wall Street Journal that suggest Fed policymakers are contemplating whether to adopt a more aggressive approach, either by reducing rates by 25 or 50 basis points. Specifically, the price of the September Overnight Index Swap (OIS) contract dropped by approximately 3 basis points to reach an intraday low of 5.04%, indicating a market expectation for a rate cut of around 28 basis points at the September meeting, close to the median level within the range as of Wednesday. Despite this, the overall expectation for the total interest rate reduction over the year remains around 103 basis points, unchanged from the previous day. These figures and expectations reflect the ongoing attention that market participants are giving to the Fed’s decision-making process, adjusting their investment strategies accordingly.