Interest Rate Futures Shift

Traders of interest-rate futures are now predicting nearly equal chances that the Federal Reserve will lower interest rates twice by the end of the year, based on data from Reuters. The first rate decrease is expected in June.

This change follows government data showing that consumer prices rose by 2.9% in the 12 months leading up to December, in line with economists’ expectations.

The core Consumer Price Index (CPI) recorded a 3.2% increase, while economists had forecasted a 3.3% rise.

Previously, traders had anticipated only one quarter-point interest rate reduction this year. However, there has been a notable shift, with the prediction now indicating a Federal Reserve rate cut by July instead of September.