(Reuters) – Traders of contracts that settle to the Federal Reserve’s policy rate moved Wednesday to price in a firmer chance of another quarter-point interest-rate cut at the central bank’s meeting next month, after a government report showed consumer inflation rose in October in line with economist expectations.
Short-term interest-rate futures contracts were pricing an 80% chance of a Fed rate cut, to the 4.25%-4.5% range, in December, up from about 60% before the data. Traders then are pricing in a slower pace of rate cuts next year, with the Fed likely stopping when the policy rate gets to the 3.75%-4% range.
(Reporting by Ann Saphir, Editing by Louise Heavens)
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