Traders see Fed waiting until September for first interest rate cut

Traders added to bets the Federal Reserve will wait until September to start cutting interest rates after the latest data showed the U.S. economy regained steam in the last quarter. Before the data, traders saw about a 9% chance of a rate cut when the Fed meets next week, but knocked that down to under 7% after a report showed the economy grew at a 2.8% pace last quarter, faster than had been expected.

Traders of futures contracts tied to the Fed policy rate continue to price in quarter-point interest-rate cuts in each of September, November and December, even as they have pared bets on a possible bigger rate cut to start the series.

 

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