Traders see Fed on hold next month, but increase bets on March cut after CPI data
The increase came after a much weaker-than-expected U.S. inflation report.
TL;DR
- Wall Street expects the Federal Reserve to hold its benchmark lending rate steady in January.
- Odds for a March rate cut have spiked to about 60% following a weak U.S. inflation report.
- The consumer price index rose 2.7% in November on an annualized basis, below economists' expectations of 3.1%.
- Markets reacted positively to the inflation data, with stocks rising and Treasury yields falling.
- The BLS acknowledged using 'nonsurvey data sources' for the November CPI due to the cancellation of the October CPI report, which may affect the interpretation of the trend.