Traders in the federal-funds futures market expect that the Federal Reserve will keep cutting interest rates this year and in 2026, after the central bank decided Wednesday to lower its policy rate by a quarter of a percentage point and announced plans to end quantitative tightening.
Fed-funds futures were pointing to an 84.3% probability that the Fed will cut its benchmark rate again in December by the same amount, according to the CME FedWatch Tool, shortly after the Fed released its policy statement at 2 p.m. Eastern time on Wednesday. Traders continued to expect that the central bank may lower its policy rate to around 3% by the end of 2026, after deciding on Wednesday to reduce it to a target range of 3.75% to 4%.
