Fed June Hike Odds Below 50% After Inflation Expectations Tumble
- ‘There’s a kind of shock in the market,’ CIBC World says
- Jobs report, consumer-price decline undermine faith in economy
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Traders are pulling back from bets the Federal Reserve will raise interest rates in June as inflation expectations crumble.
The odds of a hike have fallen back to about 44 percent from more than 60 percent earlier this month, based on a gauge compiled by Bloomberg. Yields on federal funds futures contracts for June and July are retreating as investors scale back forecasts for a move. Two-year Treasuries, among the most sensitive to Fed policy expectations, are poised for their first two-month rally in a year.