Wells Fargo: Maintains expectation of a 50 basis point cut by the Federal Reserve

Economists at Wells Fargo wrote in a recent report: "The employment report for August has little effect on the debate over whether to cut interest rates by 25 basis points or 50 basis points this month. We stick to our expectation of a 50-basis-point cut, but acknowledge the real possibility of a 25-basis-point cut." Last Friday, Federal Funds Rate futures fluctuated as markets were confused about how to interpret comments made by Fed Governor Waller after data was released. Traders briefly predicted a 79% chance that the Fed would cut rates by 50 basis points in September, but they then shifted their views and believed there was a 71% chance for a conventional rate cut of 25 basis points.