US rate futures raise odds of September easing after Fed keeps rates steady

NEW YORK, June 18 (Reuters) - Futures on the federal funds rate, which measure the cost of unsecured overnight loans between banks, raised the odds the Federal Reserve will resume cutting interest rates at the September meeting, with a 66% probability.

That was 58% before the Fed's decision on Wednesday to keep rates unchanged. In a statement, policymakers signaled borrowing costs are still likely to decline this year, but the Fed slowed the overall pace of expected easing amid the Trump administration's tariff plans.

U.S. rate futures factored in 50 basis points in rate cuts in 2025, from 46 bps before the Fed statement. That was in line with the Fed's forecast released on Wednesday of half a percentage point rate reduction this year.