Odds of Multiple Rate Cuts in 2025 Are Rising
In the wake of Wednesday’s encouraging consumer price index, Wall Street still expects the Federal Reserve to pause cutting interest rates at its January meeting. But odds of multiple cuts in 2025 were rising.
Odds of no cuts in 2025 were down to 17.3% compared to 25.7% prior to the December CPI, according to the CME FedWatch Tool. Odds of just one cut were down to 35.3% from 39.5%, signaling some traders are shifting back to bet on multiple cuts.
Indeed, odds of a half point in cuts rose to 29.7% from 24.7%, while odds of three-quarters of a point in cuts were up to 13.4% from 8.2%. Odds of a point or more in cuts rose to 4.3% from 1.8%.