Markets expect the Federal Reserve to cut interest rates slightly by 25 basis points next week

Markets now expect a 92% chance of a modest 25 basis point cut at the Fed's upcoming meeting, compared with an 8% chance of an aggressive 50 basis point cut. XS.com senior market analyst Rania Gule said that while the inflation data was not particularly surprising, a weaker labor market could provide more room for the Fed. If negative signals persist in the coming weeks, the Fed may be inclined to bolder measures. However, Gule added that the Fed's current stance remains highly cautious and is more likely to make small adjustments, while leaving room for further easing at follow-up meetings. (Golden Ten)