Traders, however, are split on the size of the impending rate cut, setting the stage for a potential volatility explosion in financial markets after Wednesday’s rate decision. At press time, the Fed funds futures showed a 50% chance of the Fed reducing rates by 25 basis points (bps) to the 5%-5.25% range. At the same time, markets saw a similar probability of a bigger 50 bps rate cut to the 4.7%-5% range.
