3/25, 10:04 PM (Source: TeleTrader)
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Most market bets point to US rate cut in 2019

A look at fed fund futures on Monday showed a further deterioration in the perceived trajectory for interest rates in the United States. CME's FedWatch tool had the probability of an increase this year at zero and 28.3% for the benchmark range to stay at 2.25% to 2.5% at 4:51 pm ET. It compares to 3.9% one month ago for an increase by a quarter of a percentage point, a standard move, while the figure marking no change was three times higher, at 82.7%.

Prices indicated a 41.2% chance for one rate cut, 23.2% for two, 6.4% for a reduction of 0.75 points and even 0.9% seeing four decreases, leaving a marginal 0.1% targeting the main policy tool at between 1% and 1.25% upon the Fed's final meeting, on December 11. The majority has swung toward at least one dovish move on March 22, when the spread between the yield on three-month and ten-year US government debt turned negative for the first time in more than a decade. The phenomenon was historically a precursor to recession.

For the next meeting of the Federal Open Market Committee, in May, odds were 92% for rates to stay unchanged against 8% for a cut.

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