finance
Markets Price In One Fed Rate Hike Despite Cooling Inflation Expectations
Market pricing shows at least one Federal Reserve rate increase still expected this year even as inflation forecasts near the central bank's 2 percent target. Lower oil prices have helped ease those forecasts, yet traders anticipate rates will remain elevated into 2027.
Jun 25, 11:17 AM·1m read4 sources
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Market measures of future inflation have moved close to the Federal Reserve's 2 percent target, supported by recent declines in oil prices. Traders nonetheless continue to assign the highest probability to at least one interest-rate increase by the central bank before the end of the year.
2027 Forward contracts also indicate that policy rates are likely to stay above current levels through 2027. Citi said those market expectations appear increasingly inconsistent with incoming economic data.
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