Markets Adjust Rate Cut Expectations After US CPI Data, Pricing in 49 Basis Points

Following the release of the latest US CPI data, financial markets have adjusted their expectations for interest rate cuts by major central banks. UK rate futures now fully price in two 25 basis point rate cuts by the Bank of England by November, an increase from the previous expectation of 47 basis points of cuts. Similarly, traders have slightly increased their bets on European Central Bank easing, now seeing 73 basis points of rate cuts in 2024, up from 71 basis points before the data release. In the US, Fed swaps indicate a faster pace of rate cuts in 2024, with Fed Funds Futures pricing in two cuts starting in September. Markets are currently pricing 49 basis points of Fed cuts in 2024, up from 29 basis points in late April.