US Stocks | US interest rate futures lift Fed’s cut bets in June after soft inflation pressures

US interest rate futures on Friday increased the likelihood of Federal Reserve rate cuts in June, following a report showing that inflation rose less than expected in January.Federal funds rate futures, which measure the cost of unsecured lending between banks, estimate a nearly 70% chance that the Fed will resume interest rates at its June meeting. That was 64% before the data was published.

However, the US central bank is still expected to keep interest rates steady at its March meeting.

Fed funds futures also implied a 64 basis points (bps) easing by the central bank after the data, compared to 58 basis points just before.

Data showed the consumer price index (CPI) rose 0.2% last month, following an unchanged 0.3% increase in December. Economists polled by Reuters had forecast the CPI to rise 0.3%.

Excluding volatile food and energy components, the CPI rose 0.3%, following an unchanged 0.2% increase in December. “As long as the CPI remains in check — which is the case so far — the interest rate discussion will return to the labor market, and under current economic conditions the Fed will likely cut rates cautiously a few times later this year,” said Chris Zaccarelli, chief investment officer of Northlight Asset Management in Charlotte, North Carolina.