Fed Rate-Cut Bets Slump, With Odds of Easing Before 2027 at 32.9%
Summary
- Kalshi data showed markets pricing in about a 32.9%% chance of a Fed rate cut before 2027.
- The 'higher for longer' outlook is gaining traction as oil prices surge, concerns over renewed inflation grow and US Treasury yields rise.
- Markets are watching how changes in the Fed's policy path could affect US stocks, cryptocurrencies and volatility across global financial markets.
Forecast Trend Report by Period
Expectations for an early interest-rate cut by the Federal Reserve 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 traders pricing in about a 32.9% chance that the Fed will cut rates before 2027.
That is the lowest level in recent months.
At the start of this year, the probability was reportedly above 90%.
The higher-for-longer outlook has gained traction as oil prices surge, concerns grow over a renewed rise in inflation and US Treasury yields climb.
Minutes from the Federal Open Market Committee released earlier showed that many Fed officials said rate increases should be considered if inflation remains above the central bank's 2% target.
Markets are closely 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.
