Will the Federal Reserve's Federal Open Market Committee cut the federal funds rate this Wednesday? It's about as close to an absolute "yes" as you can find in economics. That's been the case since Fed Chair Jerome Powell said, "The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks."

What does that mean? No one outside the central bank has any idea before the September meeting. The confusion has been like a seesaw. Look at the probability changes implied by the 30-day fed funds futures prices on the CME Group's FedWatch site and the changes are like compressed whiplash.

On August 5, 2024, on the recent equity market crash, the chance of a 25-basis-point change was 15% and a 50-basis-point change was 85%. By Monday, August 19, the chance of a 50-basis-point-cut was 24% and a 25-basis-pint cut was 76%.  A week later a 25 basis point cut went down to 68%, and a 50 basis point reduction ticked up to a 36% chance. Monday, September 9 saw 70% and 30% for 25 to 50 basis points respectively. And by Monday, September 16 — two days before the decision — odds were 50-50.