Fed Rate-Cut Odds Before 2027 Sink to 32.9% as Higher-for-Longer View Gains Ground
Summary
- Kalshi data showed markets pricing the odds of the Fed moving to cut rates before 2027 at about 32.9%.
- The higher-for-longer outlook is strengthening as oil prices surge, fears of renewed inflation build and US Treasury yields rise.
- Markets are focused on how changes in the Fed's monetary policy path could affect US stocks, cryptocurrencies, and global financial-market volatility.
Forecast Trend Report by Period
Expectations for an early Federal Reserve interest-rate cut are fading rapidly in US financial markets, reinforcing the view that rates will stay higher for longer.
As of May 21, prediction market platform Kalshi showed the odds of a Fed rate cut before 2027 at about 32.9%.
That marks the lowest level in recent months.
At the start of this year, the probability was above 90%.
The higher-for-longer outlook has gained momentum as oil prices jump, concerns about a renewed rise in inflation intensify, and US Treasury yields climb.
Minutes from the Federal Open Market Committee released earlier showed that many Fed officials believe rate increases should be considered if inflation remains above the central bank's 2% target.
Markets are now watching how any shift in the Fed's policy path could affect US stocks, cryptocurrencies and volatility across global financial markets.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.