Traders expect only one Fed rate cut this year — Bloomberg

Bloomberg reports that market participants are scaling back their projections for Federal Reserve’s rate cuts this year. Investors are currently placing only one reduction before the end of the year in their forecasts, abandoning previous more aggressive expectations. 

The sentiment shift follows May’s stronger-than-expected jobs report and productive US-China trade talks held this week in London, which eased fears of renewed trade tensions. These developments have reinforced confidence in the US economy’s resilience, reducing pressure for immediate Fed policy easing.

At next week’s scheduled meeting, the central bank is widely expected to hold rates steady. The decision will hinge on incoming economic data, including this week’s May CPI report. Bloomberg analysts note that persistent inflation readings would likely reinforce the Fed’s wait-and-see stance through summer.