Hopes for more fed rates dim as power notes hot cpi means ‘we’re not quite there yet’

A Federal Reserve Interest Rate Cut Won’T be coming until at least September, if at all this year, Following a Troubleing Inflation Report Wednsday, According to Updated Market PRICING.

Futures markets shifted from the expectation of a june cut and posesibly another before the end of the year to no moves until the fall, with a minimal chance of a minimal chance of a Follow -up before the end of 2025.

“The fed will see january’s hot inflation print as confirmation that price pressures continue to bubble benefits S Around Wall Street. “That will reinforce the fed’s inclination to at least slow and possible even even even end rate cuts in 2025.”

Reduced optimism for fed Easing came after the January consumer price index report Showed A 0.5% monthly Gain, Pushing The Annual Inflation Rate to 3%, A Touch Higher Than December and only slightly lower than the 3.1% reading in January 2024. rate That showed core inflation, which the fed tends to relay on more, also Rising and Holding Well Above The Central Bank’s Goal.

Fed Chair Jerome powerin an appearance wedding before the house finance Restrictive for now. “

As the fed targets 2% inflation and the report showed no recent Progress, it also also dimmed hopes -Term borrowing rate in 2024.

Fed Funds Futures Trading Pointed to Just A 2.5% Chance of a March Cut; Only 13.2% in May, up to 22.8% in June, then 41.2% in July and finally up to 55.9% in September, according to the Cme group’s fedwatch gauge as of late wedding morning. However, that would leave the probability still up in the air until October, when futures contrasts pricing implies a 62.1% probability.

Odds of a second cut by the end of 2025 was at just just 31.3%, with pricing not indicating another Reduction Until Late 2026. The fed funds rate is currently targeted in a ranged in a range

The issues raised in the cpi report are not happy in isolation. Policymakers also are watching White House Trade Policy, With President Donald Trump pushing aggressive tarifs That also even could boost prices and complicate the fed’s desire to get to its goal.

“There is no getting away from the fact that this is a hot report and with the sense that potential tarifs run upside Risk for inflation the market is undersrst of the View the View The Federal Resrev Y Rate Cuts in the Near Future, “Said James Knightley, Chief International Economist at Ing.

While The Fed Pays Attention to the CPI and Other Similar Price Measures, its preferred inflation gauge is the personal consumption expensesumption expertures price index, which the Bureau of Economic Analysis can be Ury. Elements from the cpi filter into the pse reading, and Citigroup said it expects to see core pse fall to 2.6% for January, a 0.2 percenant point list from December.