US rate futures price in two rate cuts in 2025, tracking Fed forecast

NEW YORK, March 19 (Reuters) - Futures on the federal funds rate, which measures the cost of unsecured overnight loans between banks, priced in 56 basis points of easing this year, or about two rate reductions, in line with what the Federal Reserve projected in its rate forecasts released on Wednesday.

The futures market has priced in two interest rate cuts for the last few weeks.

Futures also implied traders see a more than 60% chance the Fed will resume cutting rates at the June meeting and a more than 70% probability the move will happen in July, according to LSEG calculations.