NEW YORK (Reuters) – Futures on the fed funds rate, which measures the cost of unsecured overnight loans between banks, have priced in on Wednesday about 76 basis points of additional rate cuts by the Federal Reserve by the end of the year, LSEG calculations showed.
This followed a decision by the Fed to cut interest rates by 50 bps or half a percentage point on Wednesday, a larger-than-usual reduction amid growing unease about the health of the U.S. labor market.
U.S. rate futures are also betting that the Fed will reduce rates by 25 bps at the November meeting with a 57% probability and 44% chance of a 50-bp cut.
(Reporting by Gertrude Chavez-Dreyfuss)
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