Andrew Harnik/Getty Images
Both the Bank of England and the Bank of Japan will publish key rate decisions on Thursday in London and Tokyo, as well.
CME Group’s FedWatch pegs the odds of a 50-basis-point (0.5-percentage-point) rate cut from the Fed at around 59% heading into the week. And it sees at least two more quarter-point cuts in November and December.
Related: Markets push for big Fed rate cut after inflation reports
Longer term, markets are also betting on sustained Fed rate easing into 2025, with the gap between 2-year Treasury note yields and the current Federal Funds Rate trading at the widest levels in more than three decades.
“The bigger question is whether the market has been a bit optimistic about the scale of rate cuts over the next 12 months, with rates expected to be around 3% in a year’s time, down from the current level of 5.3%,” said Lindsay James, an investment strategist at Quilter Investors.
“It appears that the market has already priced in the full potential for rate cuts in the year ahead, though this may not materialize if inflation were to spike again,” she added. “While the US economy currently looks likely to avoid recession, some caution is still warranted.”
Benchmark 2-year notes were last seen trading at 3.557% heading into the start of the New York session, with 10-year note yields holding at 3.646%.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.4% lower at 100.711, the lowest in more than eight months.
On Wall Street, futures contracts tied to the S&P 500 suggest a 4-point opening-bell gain for the benchmark, with the Dow Jones Industrial Average called around 75 points higher.
The tech-focused Nasdaq is priced for a 10-point dip, thanks in part to premarket declines for Nvidia and Apple (AAPL) .
Related: Gas prices are plunging and it’s bigger news than you think
Other stocks on the move include Intel (INTC) , which rose 3.2% following a Bloomberg report that suggested the chipmaker had qualified for a $3.5 billion grant from the U.S Department of Defense.
Trump Media & Technology (DJT) shares were last seen trading 3.5% higher following news of a potential assassination threat to former President Donald Trump Sunday at his golf course in Florida.
More Wall Street Analysts:
In overseas markets, stocks traded cautiously in Europe, with the regional Stoxx 600 benchmark rising 0.05% in early Frankfurt trading and the FTSE 100 slipped 0.15% in London.
Overnight in Asia, markets in Japan were closed for that country’s Respect for the Aged Day holiday, while the regionwide MSCI ex-Japan index rose 0.49% into the close of trading.
Related: Veteran fund manager sees world of pain coming for stocks
