Traders now see two Fed rate cuts this year after benign December inflation data
2025.01.15 09:24
Investing.com — Traders of interest-rate futures are now predicting nearly equal chances on Wednesday that the Federal Reserve will lower interest rates twice by the end of this year, according to data compiled by Reuters. The first decrease is now anticipated in June.
The change comes after the government data revealed that consumer prices had increased by 2.9% in the 12 months leading up to December, which aligns with economists’ predictions.
More importantly, the core CPI reading was 3.2%, while surveyed economists saw a 3.3% jump.
Prior to this report, traders of interest-rate futures had been pricing in a single quarter-point interest rate reduction this year.
In a shift from previous expectations, traders are now pricing in a Federal Reserve rate cut by July, rather than September.
