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STORY: "The Fed making a decision in between meetings is the hot topic right now," said McGough, who believes that if the central bank does make what he called an "emergency cut" before its September meeting, it would be "a positive signal."

"But then again," McGough added, "[Fed Chair Jerome] Powell likes to be very pragmatic in his approach. So it would be a little bit of a character change for how he's approached his tenure as Fed Chair, and I don't think he wants to get out in front of the [presidential] election. He wants to stay independent with what all is going on in Washington, D.C."

Wednesday's U.S. consumer price index reading and Thursday's retail sales figures for July will provide the Fed with more economic data.

Money markets are evenly betting on a 25- or 50-basis-point cut in U.S. interest rates in September, expecting a total easing of 100 bps by the end 2024, CME's FedWatch Tool showed.