Market Sees Fed Rate Cuts After CPI Data Drop

The U.S. Consumer Price Index (CPI) release has triggered a shift in market sentiment, with economists now anticipating a cumulative 77 basis points decrease in the Federal Reserve’s benchmark interest rate over the next year. By December, this cut is projected to reach 48 basis points, marking a substantial change from previous expectations. Previously, markets had anticipated a smaller 67 basis point reduction over the same timeframe, with a separate 42 basis point adjustment in December. Traders are now more bullish on two rate cuts by the Federal Reserve this year.