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Traders No Longer Fully Price In One Federal Reserve Rate Cut for 2026

According to the latest market moves, traders reduced expectations for Federal Reserve easing this year as Treasury yields rose amid inflation concerns and Middle East tensions.

Summary

Traders further scaled back expectations for Federal Reserve easing, pricing in 24 basis points of cuts this year versus about 30 basis points on Wednesday. The repricing came as U.S. Treasuries declined and the 2-year Treasury yield rose 4 basis points to near 3.70% on March 12, with market sentiment affected by Middle East conflict and inflation concerns.

Terms & Concepts
  • Federal Reserve: The central bank of the United States, responsible for monetary policy and interest-rate decisions.
  • Rate cut: A reduction in benchmark interest rates, typically used to support economic activity and ease financial conditions.
  • basis points: A unit equal to one-hundredth of a percentage point, commonly used to describe changes in interest rates and bond yields.