Regional-bank woes have traders seeing almost 50% chance of Fed rate cut in July

Fresh troubles in the U.S. regional-banking sector are prompting fed funds futures traders to place an almost 50% chance on Federal Reserve policy makers cutting interest rates at their July 25-26 meeting. Behind the latest worries are concerns about PacWest Bancorp. PACW, which saw its stock price tumble more than 20% on Thursday to less than $5 a share after the California-based bank reported a 9.5% deposit decline last week.

As shares of other regional banks also fell, traders briefly priced in a 50% likelihood that Fed…