By Esther Ososanya
The Federal Reserve is almost certain to cut interest rates in September after fresh inflation data showed prices rising at a moderate pace in July, with Treasury Secretary Scott Bessent hinting a surprise half-point reduction was on the table.
Traders in federal funds futures are now pricing a 99.9% probability of a rate cut at the Sept. 16–17 meeting, according to CME FedWatch estimates.
The shift follows the latest Consumer Price Index report and Bessent’s remarks pointing to recent job market weakness.
Bessent noted Bureau of Labour Statistics revisions showing sharply slower job growth in May, June, and July, a stark contrast to earlier estimates that painted a stronger labour picture.
Those initial figures, he argued, kept the Fed from easing sooner.
“If we’d seen those numbers in May or June, I suspect we could have had rate cuts earlier,” Bessent said in a televised interview. “That tells me there’s a very good chance of a 50 basis-point cut in September.”
Trump Criticism and Powell Succession
President Donald Trump has criticised last year’s pre-election rate cut as politically driven. Now, with the White House weighing replacements for Fed Chair Jerome Powell, the candidate list has expanded to 11 names, including Vice Chairs Philip Jefferson and Michelle Bowman, Governor Christopher Waller, Dallas Fed President Lorie Logan, and ex-CEA chair Kevin Hassett.
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Bessent’s preferred cuts would take the benchmark rate from 4.25%–4.50% down to about 3% — close to the Fed’s “neutral” rate. That’s far above Trump’s call for 1%, but still a sharp shift in stance.
Fed officials remain cautious, warning that tariffs could cause a temporary uptick in prices, but more policymakers are signalling concern about rising unemployment.
Vice Chair Bowman said Saturday that a proactive move toward neutral policy could “avoid a further unnecessary erosion in labour market conditions” and prevent the need for a larger correction later.
Esther Ososanya is an investigative journalist with Pinnacle Daily, reporting across health, business, environment, metro, Fct and crime. Known for her bold, empathetic storytelling, she uncovers hidden truths, challenges broken systems, and gives voice to overlooked Nigerians. Her work drives national conversations and demands accountability one powerful story at a time.
