Traders in the federal-funds-futures market appeared nearly certain Friday that the Federal Reserve will cut interest rates two more times this year, as they weighed fresh inflation data that was softer than expected.
Fed-funds futures showed a 98.9% probability that the Fed will decide at its policy meeting next week to lower its benchmark rate by a quarter percentage point, according to the CME FedWatch Tool on Friday, shortly after the Bureau of Labor Statistics released inflation data from the consumer-price index. Traders were pricing in a 96.5% chance of a rate cut of the same size in December, which would bring the Fed’s policy rate to a target range of 3.5% to 3.75%.
