Inflation and labor-market developments should allow Federal Reserve officials this week to signal that a cut is very possible at their next meeting, in September.

Over the past couple of years, the Federal Reserve aggressively raised its key interest rate to a 23-year high to beat down inflation. Now that inflation has slowed substantially and is expected to cool further,

Interest-rate futures indicate a 100% probability that the Fed will cut at least once by September and a 97.8% probability that it will go at least twice by year-end, according to CME FedWatch. (Only 4.7% see the Fed acting at its next meeting on July 31.)

If it makes the change soon rather than waiting until September or December, the markets would cheer.

Savings rates are likely to drop as soon as the Fed signals it will cut interest rates. Although banks have lowered their savings rates from the record highs of last year, you can still lock in annual percentage yields of 5% or more on your money with high-yield savings accounts and CDs .

"We think the Fed can be patient," Bank of America economists wrote in new research.

Two years after launching an aggressive fight against inflation and one year after leaving its benchmark interest rate at a near-quarter-century high, the Federal Reserve is expected to signal this we

Federal Reserve officials are on the verge of lowering borrowing costs within months, a move Chair Jerome Powell may signal in the coming week.

Federal Reserve officials are on the verge of lowering borrowing costs within months, a move Chair Jerome Powell may signal in the coming week as the risks grow of imperiling a solid but moderating job market.

CommSec’s Tom Piotrowski says the US Federal Reserve is expected to cut rates in September following the release of “better-than-expected” inflation figures.