Traders cemented odds the Federal Reserve will cut interest rates by only a quarter-point next week after US consumer inflation arrived a little hotter on the core reading for last month.
Michael Mackenzie, Bloomberg NewsJoseph Gagnon, senior fellow of Peterson Institute for International Economics, joins BNN Bloomberg to discuss the U.S. inflation cools to 2.5%.
“We were never in the 50 basis point camp, and it seems like the modest upside surprise in CPI would likely be enough to give any policymakers considering a bigger move pause,” said Zachary Griffiths, head of US investment grade and macro strategy at CreditSights. “Inflation has now cooled to room temperature, there is really not a significant inflation problem,” David Kelly, chief global strategist at JPMorgan Asset Management, told Bloomberg Television after the CPI report was released Wednesday.
Interest-rate swaps showed that traders have fully priced in a 25-basis-point Fed cut at the Sept. 18 policy announcement and see only a small chance for a half-point reduction. Fed swaps are pricing in about 145 basis points of rate cuts by the Jan. 29 rate decision, equivalent to roughly two half-point moves over the next four gatherings barring no intra-meeting event.
“The Fed is going to go 25 basis points next week,” Andrew Brenner, head of international fixed income at NatAlliance Securities, said in a telephone interview.
Business Government Markets North America Top News Unites States World Top World
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Traders bet against BNB: Is a price reversal likely now?Most traders are betting against Binance, leading to a bearish sentiment and potential downward price pressure.
Read more »
63% Bitcoin traders bet on long positions: Will this take BTC beyond $60K?Bitcoin maintains a precarious grip on the $60,000 level amidst high market volatility, with traders overwhelmingly favoring long positions.
Read more »
NEAR’s road to recovery: Traders bet on rise to $5.2 and beyondAMBCrypto predicts a NEAR rally with the potential to reach $5.2, driven by increased liquidity, bullish patterns, and strong buying interest.
Read more »
Gold shines as stocks and cryptos slide, traders bet on 4 rate cuts in 2024The Kitco News Team brings you the latest news, videos, analysis and opinions regarding Precious Metals, Crypto, Mining, World Markets and Global Economy.
Read more »
Bond traders look to U.S. CPI to buttress half-point rate cut betsInvestors who’ve positioned for even more gains in the Treasury market are looking for U.S. inflation data that reinforces the case for a faster pace of U.S. Federal Reserve interest-rate cuts.
Read more »
Fed most likely to cut rates by quarter percentage point next month, Daly saysSan Francisco Federal Reserve President Mary Daly on Monday said 'the time is upon us' to cut interest rates, likely starting with a quarter-percentage point...
Read more »