Small font size A Larger text size A Largest text size A

Fed's next rate cut will be smaller, traders bet

BY Reuters | ECONOMIC | 09/19/24 08:52 AM EDT

(Reuters) - Traders on Thursday added to bets the U.S. Federal Reserve's next rate cut will be smaller than the one it delivered on Wednesday, after economic data showed an unexpected drop in unemployment insurance claims.

Interest-rate futures contracts now price in about a 30% chance that the Fed, which cut rates by half a percentage point on Wednesday, will deliver a second cut of the same size in November. The market-based probability of a quarter-point rate cut in November is now about 70%, up from around 65% before the data.

(Reporting by Ann Saphir; Editing by Tomasz Janowski)

More Fixed Income News

Turkish central bank cuts rates after 18-month tightening drive BY Reuters |ECONOMIC 06:10 AM EST
China revises up 2023 GDP, sees little impact on 2024 growth BY Reuters |ECONOMIC 06:01 AM EST
PRECIOUS-Gold firms in holiday-thinned trade, spotlight on Fed and Trump policies BY Reuters |ECONOMIC 05:34 AM EST
China revises up 2023 GDP to $17.73 trln, rules out impact on 2024 figure BY Reuters |ECONOMIC 03:42 AM EST

All Fixed Income News

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

fir_news_article