According to CME Group’s FedWatch Tool, the probability of a 25 basis point rate cut at the September 17 FOMC meeting has risen to 90.1%. Earlier in the day, this probability was calculated at 89.1%. This indicates that expectations have strengthened significantly during the day. 

In contrast, the probability assigned by investors to rates being held steady is just 5.6%, showing how clearly the market is positioned for a rate cut. 

Trump and the Fed Chairmanship: Another Factor Behind the Rate Cut Expectation 

Meanwhile, another factor boosting the probability of a rate cut is Trump’s plan to appoint a new Fed Chair. President Trump is reportedly planning to replace Adriana Kugler, whose term is ending, with someone who favors rate cuts. Kugler has consistently voted against rate cuts throughout 2025. If she remains on the board until the September meeting, she is expected to vote again to keep rates unchanged. 

The Fed has held the policy rate steady at the 4.25%–4.50% range since December 2024. No changes have been made over the last five meetings. However, the July 2025 non-farm payroll report, showing just 73,000 new jobs versus the expected 147,000, triggered a sharp market reaction. This gap has raised concerns about the strength of economic growth. 

BlackRock’s 50 Basis Point Surprise Forecast: Cautious Optimism in Markets 

Moreover, it’s not just a 25 basis point cut that’s on the table—there’s talk of a 50 basis point move. BlackRock’s Chief Investment Officer Rick Rieder suggested that a more aggressive cut in September is possible. According to Rieder, the Fed may implement two or three more cuts throughout the remainder of the year. 

According to BlackRock’s institutional market outlook, current U.S. economic conditions demand a looser monetary policy. Inflationary pressures and slowing consumer spending further support this expectation. 

Still, the timing and scale of the rate cut remain crucial. Investors are closely watching the Fed’s September decision. The pressure created by weak jobs data will largely shape the outcome. 

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Bessent stated, “There are many strong candidates. We’ll see how things develop depending on the pace of the process.” Meanwhile, current Fed Chair Jerome Powell’s term is set to end in May 2026. However, Bessent emphasized that reappointing Powell at the end of his term could cause confusion in the markets. He also noted that the pace of the process would directly depend on Trump’s decisions. 

In financial circles, Powell’s potential reappointment has long been debated. In recent months, increasing political pressure and disagreements over monetary policy have further intensified these discussions. 

Trump Pressures Powell: Political Tension Grows 

U.S. President Donald Trump has been one of the voices accelerating the process, stating that Powell should leave office. Trump argued that the Fed’s failure to cut interest rates on time has harmed the U.S. economy. 

As political pressure mounts, uncertainty is also building in the financial markets. According to Polymarket data, names such as Kevin Warsh, Kevin Hassett, and Scott Bessent are emerging as leading candidates for the next Fed chair. 

All three are known figures in public discourse regarding economic policy. Bessent’s current position and influence in the markets place him at the top of the list. Despite Powell’s term lasting until 2026, the early search for a successor signals the White House’s intention to be more directly involved in monetary policy. 

Meanwhile, an official timeline for the process has not yet been released. However, sources indicate that the list of candidates will be narrowed down in the coming months. The race for the Fed chair is not only capturing the attention of financial circles but also directly impacting politics. Ultimately, the direction of U.S. monetary policy will play a critical role for markets ahead of the presidential election. 

As the selection process continues, investors will closely monitor every development. 

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