10-Year Indicates Fed Is Close to Ending Rate Hike Cycle

The Federal Reserve is expected to lift interest rates again at the next FOMC meeting on Feb. 1, but the futures market is pricing in high odds that the increase will be trimmed to a relatively mild 25 basis points. Animating the softer outlook for monetary policy changes is yesterday’s encouraging news on inflation. Consumer prices fell 0.1% in December, the biggest monthly decline since the pandemic ravaged the economy. The year-over-year increase, although still elevated, continues to ease, too, slipping to 6.4% at the headline level, the lowest since Oct. 2021 and well below the recent peak of 9.0% in June 2022.
Source: Bonds Analysis & Opinion