Traders begin to bet on a 50 basis point rate cut by the Federal Reserve in September

ChainCatcher news, according to Jinshi reports, bond traders are increasing their bets that the Federal Reserve will cut interest rates by 50 basis points in September, rather than the standard 25 basis points. BlackRock's Global Head of Fundamental Fixed Income Strategy, Marilyn Watson, stated that it is very likely the Federal Reserve will cut rates in September. However, she also believes the Fed may start acting as early as July.

CME Group Inc.'s futures open interest data shows that last Thursday's buying volume approached 260,000 contracts, setting a record for October contracts. Buying interest remained high last Friday. The higher-priced buying indicates that more people believe the Federal Reserve may initiate the first easing cycle in recent years with a large-scale move.

Last week, Federal Reserve officials were considered to have sent the strongest signal for a rate cut so far. In their public appearances last week, including two congressional hearings by Fed Chair Powell, officials displayed new confidence when discussing their control over inflation and whether they were ready to begin a policy shift. Pimco economist Tiffany Wilding said that after last week's data release, a rate cut in September is already a "done deal."