Market expectations for a U.S. Federal Reserve interest rate cut in September have risen sharply, with prediction markets and traders now pricing in approximately a 94% to 95% probability of a 25 basis point reduction. Various sources, including Polymarket, Kalshi, and bond market data, indicate that the likelihood of a modest rate cut is significantly higher than the chance of a larger cut, which remains around 9%. This shift reflects growing anticipation that the Fed will initiate an easing cycle soon, potentially providing a bullish catalyst for risk assets such as cryptocurrencies. Meanwhile, in Canada, the swap market has increased the probability of a Bank of Canada rate cut in September to 38%, up from 33% before recent jobs data. The Canadian dollar weakened to its lowest level of the day following disappointing employment figures, and the 10-year Canadian government bond yield fell by 2.8 basis points to 3.374%. Traders are now fully pricing in a Bank of Canada rate cut by the end of the year.