Traders see a 50%+ chance of a Fed rate cut in September

Traders foresee a 50%+ chance that the U.S. Federal Reserve will cut interest rates at the September FOMC meeting. The spread between the yields of 2-year and 10-year U.S. Treasury bonds has widened to 60bp, the widest since April. A widening gap between short-term and long-term Treasuries is interpreted as a signal of economic recovery expectations or a possible policy shift. This is due to speculation about the potential resignation or dismissal of Fed Chairman Jerome Powell.