Fed won't start rate cuts until May, traders now bet
Federal Reserve won't start easing policy until May, traders bet on Friday, capping a week during which stronger-than-expected economic data and commentary from central bankers chipped away at financial market confidence in the idea of an earlier start to interest-rate cuts.
On Friday, a widely watched measure of consumer sentiment rose to its highest level in 2-1/2 years, and Chicago Fed President Austan Goolsbee said the U.S. central bank won't commit itself to rate cuts until it is surer that inflation is on track to a healthy 2%.
Futures contracts that settle to the Fed's policy rate fell, and now reflect about a 47% chance of a Fed rate cut by March, down from 55% earlier in the day.
Just a week ago the probability of an interest-rate cut in March from the current range of 5.25%-5.5% was seen at nearly 80%, reflecting faster-than-expected declines in inflation.
