Fed seen resuming interest-rate cuts in June as inflation heads lower

(Reuters) – Cooler inflation could allow Federal Reserve policymakers to resume interest-rate cuts later this year, with traders betting Tuesday on three quarter-point reductions in the policy rate by the end of 2025, starting in June.

Consumer prices rose 2.8% in February from a year earlier, a government report showed on Tuesday, less than the 2.9% that economists expected and down from 3% in January. U.S. central bankers, who target 2% inflation, meet next week and are nearly universally expected to leave the policy rate in its current 4.25%-4.50% range.

(Reporting by Ann Saphir; Editing by Chizu Nomiyama)