The U.S. interest rate swap market indicates that traders expect a 100% probability of a rate cut at the Federal Reserve's September meeting.

Overnight index swap contracts linked to the Federal Reserve meeting completely digested expectations of a 25 basis point rate cut at the September FOMC meeting on Wednesday evening. There was a large volume of trading in federal funds rate futures contracts. Before 3:00 PM New York time, the federal funds rate futures contracts for August and October were active, with a significant amount of trading in the secured overnight financing rate futures contract for September 2025. The OIS rate tied to the Fed's September policy meeting thus fell to an intraday low, close to 4.08%, indicating a 100% chance of a 25 basis point rate cut. Looking further out on the swap curve, the market currently expects a total of 62 basis points in rate cuts at the remaining three FOMC meetings this year, up from 59 basis points at the close on Tuesday.