Jan 12, 2024: On Friday, traders adjusted their expectations, indicating a higher probability that the Federal Reserve would implement further monetary policy easing in the current year. This shift came after a U.S. government report revealed lower-than-expected inflation in the wholesale pipeline. Futures contracts, tied to the Fed’s target for the overnight lending rate between banks, experienced an uptick following the release of data indicating a 0.1% decline in the producer price index in December compared to the previous month. Economists had initially anticipated a 0.1% increase. The updated futures contract prices now suggest an outlook for rates to drop below 3.75% by the end of the year, in contrast to the earlier projection within the 3.75%-4% range, with the first rate cut expected in March.
Traders Increase Bets on Fed Rate Cuts Amid Producer Prices Decline
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