🇺🇸 Major Shift in Early 2025 Rate Cut Expectations 📉
The market's outlook for a January interest rate cut from the Federal Reserve just cooled down significantly. According to the latest data, traders now see only a 13.3% chance of a cut happening—a dramatic drop from the 28.8% probability priced in just a short while ago.
This isn't just a minor adjustment; it's a meaningful recalibration. Investors are likely reacting to stronger-than-expected recent economic data, which suggests the economy may still be running too hot for the Fed to start lowering rates right at the new year. The focus is increasingly shifting toward the Fed's meetings later in the first quarter, as the market searches for clearer signs that inflation is sustainably headed toward the 2% target.
This shift reminds us that the path to lower rates won't be a straight line. The Fed is walking a tightrope, balancing growth against inflation, and the market's expectations will continue to swing with every new economic report. For now, it seems the consensus is settling in for a little more patience.
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