Markets continue to expect the Federal Reserve to deliver just one more quarter-point interest-rate cut this year, but there’s a little less certainty than before.
There is a 34% chance that the Fed’s key rate finished the year at 4%-4.25%, compared with 4.25% to 4.5% now, according to the CME FedWatch tool. That’s down from 40% a week ago and 36% this time last month.
An encouraging inflation reading for December, published last week, is the most obvious reason for traders to have a little more optimism that more cuts are possible.