A rate cut is expected, but the key question is whether it will be a 25 or 50-basis point reduction.

The yield curve recently 'un-inverted' after being inverted for 2 years, a signal that often precedes a recession.

Despite the yield curve un-inverting, concerns about a recession like those in 2001 or 2007 remain, pushing the Fed toward more cuts.

August’s unemployment rate stood at 4.2%, still far above the historical low of 3.4%, prompting concerns about economic health.

Fed Chair Jerome Powell has emphasized that the Fed is closely watching the labour market rather than just inflation rates.

US Manufacturing PMI remained weak at 47.2, indicating continued contraction, which supports the case for a 25-basis point cut.

Job openings in July hit their lowest level since January 2021, increasing the likelihood of a larger rate cut to avoid further cooling.

While inflation has dropped to 2.5%, underlying inflation, driven by rising shelter costs, remains a concern for the Fed.

With inflation managed but labour market concerns persisting, most economists predict a 25-basis point cut from the Fed.