Interest-Rate Futures Traders Adjust Expectations

(Reuters) – Traders of interest-rate futures that settle to the Federal Reserve's policy rate have increased their bets that the central bank will cut borrowing costs next week. This shift comes after economic data revealed that weekly claims for unemployment insurance unexpectedly rose.

Traders now estimate the probability of a rate cut next week at approximately 97%, up from about 94% prior to the report. Additionally, they are anticipating another three quarter-point rate cuts in 2025.