Traders Anticipate Federal Reserve Rate Cuts

(Reuters) – Traders have priced in a quarter-point Federal Reserve interest-rate cut this month, anticipating a larger move in the upcoming meeting. Fed Governor Christopher Waller stated that recent labor market data indicates it’s time to reduce rates, and he is open to supporting a bigger cut if warranted by the data.

Currently, traders assign a 70% probability to a quarter-point reduction this month, according to rate-futures prices. By the Fed’s November meeting, they expect a policy rate range of 4.5%-4.75%. The policy rate has remained at 5.25%-5.50% for over a year.