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Investing.com - Traders on Wednesday upped their bets on another rate cut by the Federal Reserve this month, with odds of an October rate cut rising to 75% from 62% a day earlier, according to Investing.com's Fed Rate Monitor Tool.
The Fed is expected to cut rates to a range of 1.50% from 1.75% from the current range of 1.75% to 2.00%.
The jump in investor expectations for a Fed rate cut came after soft economic data raised fears that a recession may be on the horizon. Recent data showed the U.S. economy created fewer-than-expected private jobs last month, while a key gauge of U.S. manufacturing showed the worst reading since 2009.
Underscoring the fear of a recession, markets slumped Wednesday, with the S&P 500, Dow and Nasdaq Composite down nearly 2%.