The U.S. February consumer-price index (CPI) report, which showed an unexpected acceleration in the headline inflation rate last month, did not alter markets' bets on the timing of the first reduction in the Federal Reserve's interest rates. They continue to price in a 25-basis-point cut for June.
According to the CME FedWatch Tool, markets now see a 69.7% chance that the Fed will decrease its rates by at least a quarter point from the current level of 5.25%-5.50% to 5.00%-5.25% after its June 11-12 meeting, versus a 71.6% probability a day ago.
The chances of the moves at the Fed's gatherings in March and May are priced at 1.0% and 11.2%, respectively.