50bps in Sept?!?!> Bets that the Fed will reduce rates by more than 25 basis points in September also gained traction on Tuesday, with traders adding some $2 million in premium to a position in the Secured Overnight Financing Rate (SOFR) that would benefit from such a move. In an interview Tuesday, Treasury Secretary Scott Bessent suggested that the Fed ought to be open to a bigger, 50 basis-point cut next month. “Today’s inflation report was a bit stronger than we have seen over the prior few months, but lower than many have feared,” said Rick Rieder, chief investment officer of global fixed income at BlackRock, in a note. “As a result, we expect the Fed to begin cutting rates in September, and it could be justified cutting the Funds rate by 50 basis points.” (Bloomberg)