What will the US Fed do for its September FOMC?

Well, the time has come again for the US Fed to decide on its fed rates.  What will the US fed do in September?

It is already cast in stone that the US Fed will cut its rates.  The only question is either a 25bp or 50bp cut.  Let's take a look at the Fedwatch tool.

The Fedwatch tool is showing a 50-50 probability for 25 & 50bp cut.

What's our take on this? We expect the US Fed to do a 25bp rate cut because the US inflation may rebound later as the 5-year Michigan inflation expectation has risen to 3.1% and the monthly core inflation is also on an upward trend.

Michigan inflation expectation (5yr): 3.1%