Improving news on inflation again has raised investors' hopes that the Federal Reserve soon will start to aggressively lower interest rates.
Futures market pricing now indicates that while the Fed will remain on hold at next week's policy meeting, it will commence cutting in September and move again in November and December.
The market-implied probability for a September cut nudged up to about 90% Friday morning, according to the CME Group's FedWatch Tool that measures fed funds futures pricing.
Traders in early 2024 were pricing in at least six cuts this year, but the central bank's rate-setting group has remained on hold for a year.
Following the two-day meeting that concludes next Wednesday, the Fed meeting schedule is empty for August, save for the all-important annual conclave in Jackson Hole, Wyoming.
Persons:
Joseph Brusuelas, —, Jerome Powell, Christopher Waller
Organizations:
Federal Reserve, Friday's Commerce Department, RSM, Traders, Federal Open, Fed
Locations:
Jackson Hole , Wyoming