Traders Now Expect Fed Policy Rate to Peak in September Not July
- Near-term hike expectations doused by cooling inflation
- Swaps still favor a rate cut during second half of year
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Traders are continuing to tweak their expectations for US interest rates as the Federal Reserve meets and have now begun to anticipate the central bank’s policy rate peaking in September rather than July.
The latest calculations extend Tuesday’s more dramatic reassessment sparked by May inflation readings that were more benign than expected. Those led to a drop in wagers on a hike at the meeting that concludes at 2 p.m. in Washington as well as a paring of bets that the Fed will lower rates at any point this year.