Traders Hold Expectations for June Fed Rate Cut Despite December Inflation Increase
Traders remain optimistic that the Federal Reserve will postpone interest rate hikes until June, despite inflation readings aligning with economists' projections.
Released alongside hawkish monetary policy comments by Fed Governor Michelle Bowman, data revealed a 2.6% rise in inflation in December. Futures traders anticipate a 70% likelihood that the short-term borrowing rate will remain below or equal to 4.25% following the June Fed meeting.
Predictions for a second and final interest rate cut in October 2025 remain unchanged.