Futures markets are also expecting a rate cut. Investors peg the chances of a quarter-point interest rate cut at nearly 96%, according to the CME FedWatch Tool, a measure of market sentiment.

After somewhat positive inflation data in July, the chances of the Federal Reserve cutting interest rates in September are at roughly 83%, according to CME Group 's FedWatch tool calculations on Aug. 18. One month earlier, roughly 59% of traders betting on changes in the federal funds rate thought an interest rate cut would occur in September.

A Federal Reserve interest rate cut in September, the first this year, followed perhaps by another before year-end remains the base forecast for most economists polled by Reuters.