Traders have slightly reduced their expectations that the "Federal Reserve" will cut interest rates by a full percentage point during the current year, following the release of a government report showing that the U.S. economy contracted at an annual rate of 0.3% in the last quarter, amid American companies rushing to purchase imported goods before the expected tariffs are imposed.
However, futures contracts linked to the Federal Reserve's key interest rate still indicate the start of a rate-cutting cycle in June, with expectations for four quarter-point cuts, which could push the interest rate to a range between 3.25% and 3.5% by the end of the year.
Anticipation in the absence of clear signals regarding inflation and the labor market
Policymakers at the "Federal Reserve" indicated their intention to keep interest rates unchanged, awaiting clearer indications of inflation approaching the central bank's target of 2%, or signs of deterioration in the labor market.