Fed's rate-cut hopes dim
Markets have largely abandoned early easing after the Commerce Department’s January PCE showed headline inflation down but core inflation stubborn at ~3.1%—a print the Fed watches closely—so traders now push the earliest rate cut to September rather than summer reported and reported. Mortgage rates have ticked up to a one-month high as markets price a longer period of restrictive policy.
Futures traders moved the market’s most‑likely timing for the Fed’s first cut to September. money.usnews.com The Commerce Department’s January PCE showed headline PCE at 2.8% year‑over‑year and core PCE at 3.1% y/y with a 0.3% monthly gain. foxbusiness.com Treasury yields firmed— the 10‑year yield rose to about 4.28% on March 13— and the average 30‑year fixed mortgage rate increased to 6.11% for the week ending March 12, a one‑month high. tradingeconomics.com Major forecasters pushed back cut forecasts—Barclays shifted its call to September— and market‑implied odds showed virtually no chance of a cut at the next meeting and only roughly a 70% chance of any cut this year; the Fed’s next decision is scheduled for March 18. msn.com
