The probability of a rate cut next month has fallen to 22%, and that may actually be a constructive sign.

Historically, periods where the Fed cut rates aggressively for 8 to 12 months in a row have often preceded a recession. In contrast, limited cuts followed by pauses have generally supported market strength.

The reason is that sharp and prolonged easing usually signals economic stress, which markets tend to read as bearish. Fewer, more measured cuts suggest stability and are often viewed more positively by investors.