Fed Rate Cut Madness: Will Jerome Powell Cave to Trump’s Tantrums? 🤔

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Oh, the drama! President Trump has been treating Federal Reserve Chair Jerome Powell like a bad Yelp review—relentlessly complaining and demanding refunds (or in this case, rate cuts). And guess what? Traders are eating it up like free samples at Costco. According to CME’s Fedwatch data, there’s an 85.7% chance we’ll see a quarter-point rate cut in September. That’s practically a certainty in the world of economics, where even a 60% probability feels like a psychic’s prediction.

Kalshi, Polymarket, and Wall Street Place Their Bets 🎰

It seems everyone with a keyboard and an opinion is betting on whether the U.S. central bank will cave to Trump’s pressure. Remember, this is the guy who’s been publicly roasting Powell like a Thanksgiving turkey for not lowering rates fast enough. The last time the Fed trimmed rates was December 18, 2024—yes, I had to Google that too—and now Trump is acting like it’s been decades. “Lower them faster!” he cries, as if the federal funds rate is some kind of overpriced avocado toast.

The next Federal Open Market Committee (FOMC) meeting is set for September, and traders are practically salivating at the idea of a modest 25-basis-point cut. Over on Polymarket, they’ve slapped a 73% probability on this happening. Meanwhile, the odds of a more aggressive 50-plus-point cut are lingering around 8%, which is about as likely as me winning the lottery. A “no change” scenario sits at a measly 20%, and the idea of a rate hike? Let’s just say it’s less probable than finding a decent avocado at the grocery store—1% to be exact.

Over on Kalshi, another U.S.-regulated prediction platform, traders are equally convinced. They’re giving a 72% chance of a 25-basis-point cut in September. Staying put? Only 19%. And a deeper cut? Ha! Just 9%. Clearly, no one expects the Fed to go full “Avengers assemble” on monetary policy anytime soon. It’s all about baby steps, folks.

And then there’s the CME Fedwatch tool, which reads like a horoscope for economists. Its crystal ball says there’s an 85.7% chance of a 25-basis-point cut, bringing the target range down to 4.00%-4.25%. The odds of keeping things status quo? A mere 14.3%. So, unless the economic gods decide to throw us a curveball, September might feel less like a Fed decision and more like a polite suggestion to chill out, Wall Street.

If these predictions hold true, September could mark the beginning of a gentler Fed approach—a sort of “soft reset” for the economy. This move may ease some political heat and give Wall Street something to cheer about besides memes of Elon Musk. But it also sets the stage for how the Fed plans to tiptoe through the rest of the year’s minefield of challenges, like tariffs and inflation. Spoiler alert: It won’t be easy. 😅

So buckle up, folks. Whether you’re Team Trump or Team Powell, one thing’s for sure: the Fed’s decisions are about to become the most-watched reality show since *The Bachelor*. 🍿

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2025-08-04 19:58