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2025-12-18 21:59:19
[Inflation Data Boosts Rate Cut Bets, Market Slightly Upgrades Expectations for Fed Easing Next Year] ⑴ Following the release of lower-than-expected US November CPI data, the federal funds rate futures market reflected a slightly increased likelihood of a rate cut at the Fed's January policy meeting. ⑵ Traders now see a 28.8% probability of a 25 basis point rate cut in January, up from 26.6% before the data release. ⑶ For the entire year of 2026, traders are betting on approximately 64 basis points of Fed easing, a slight increase from 63 basis points before the data release. ⑷ This slight adjustment in market pricing indicates that despite the positive signals from the inflation data, traders remain relatively cautious about the Fed immediately initiating a new round of rate cuts, only slightly revising their easing expectations for the year upwards. ⑸ Market attention has now shifted to the verification of subsequent data and how Fed officials interpret this inflation report, which may have been influenced by technical factors.
