financetom
Economy
financetom
/
Economy
/
Fed seen on track to Sept rate cut after inflation data
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
Fed seen on track to Sept rate cut after inflation data
Jun 12, 2024 7:27 AM

(Reuters) - Federal Reserve policymakers may feel more confident that inflation is back on a downward path after a U.S. government report showed consumer prices did not rise at all in May, potentially paving the way for interest-rate cuts in coming months.

U.S. central bankers, who wind up their meeting on Wednesday, are universally expected to make a decision to hold the policy rate in its current 5.25%-5.5% range.

But the unexpectedly benign inflation report, which also showed underlying price pressures cooled to a level more consistent with the Fed's 2% inflation goal, could set them up for a rate cut as soon as September, and another one in December.

"After three months of veering off-track, the disinflation bus is back on the road to 2%,"said Brian Jacobsen, chief economist at Annex Wealth Management.

Short-term interest-rate futures are now pricing in nearly a three-to-one chance of a rate cut by September, up from only slightly better than a coin toss earlier in the day.

Traders also added to bets on a second Fed rate cut by December, with rate-futures pricing reflecting a rising chance but still less-than-50% chance of a third rate cut by the end of the year.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Trump's Potential Federal Reserve Pick Defends Rate Cuts After Ex-President Slammed Jerome Powell's Move
Trump's Potential Federal Reserve Pick Defends Rate Cuts After Ex-President Slammed Jerome Powell's Move
Oct 18, 2024
Donald Trump‘s potential nominee for the Federal Reserve, Kevin Hassett, has defended the central bank’s recent interest rate reduction, despite Trump’s criticism. What Happened: Hassett, a former Trump economic adviser, justified the half-point rate cut citing a weakening jobs market, Financial Times reported on Friday. In an interview with the FT’s Unhedged newsletter, Hassett stated, “The latest move to start...
Fed's Bostic says he is in no rush to get rates down to neutral
Fed's Bostic says he is in no rush to get rates down to neutral
Oct 18, 2024
(Reuters) - Atlanta Federal Reserve Bank President Raphael Bostic said Friday he will be patient on cutting rates to make sure inflation does not stall out above the U.S. central bank's 2% target.     I'm not in a rush to get anywhere, Bostic told the Mississippi Council on Economic Education Forum on American Enterprise in Jackson, Mississippi. We must get...
US Dollar Falls Early Friday Before Housing Starts, Fed Appearances
US Dollar Falls Early Friday Before Housing Starts, Fed Appearances
Oct 18, 2024
07:52 AM EDT, 10/18/2024 (MT Newswires) -- The US dollar fell against its major trading partners early Friday before the release of September home building data at 8:30 am ET. Atlanta Federal Reserve President Raphael Bostic is due to speak at 9:30 am ET, followed by Minneapolis Fed Governor Neel Kashkari at 10:00 am ET, Fed Governor Christopher Waller at...
US single-family homebuilding rises to five-month high
US single-family homebuilding rises to five-month high
Oct 18, 2024
WASHINGTON (Reuters) - U.S. single-family homebuilding surged to a five-month high in September, but permits for future construction rose only marginally amid excess supply of new homes on the market and prospective buyers holding out for lower mortgage rates. Despite the second straight monthly increase in single-family housing starts, economists expected that residential investment, which includes homebuilding and sales, was...
Copyright 2023-2025 - www.financetom.com All Rights Reserved