NEW YORK, Dec 16 (Reuters) – Futures on the federal funds rate, which measure the cost of unsecured overnight loans between banks, on Tuesday briefly raised the probability of the Federal Reserve cutting interest rates at the next policy meeting in January after data showed U.S. unemployment rose last month.
The market priced in a 31% chance the Fed will reduce rates next month immediately after the nonfarm payrolls report, compared with 22% just before. It was last at 24%, while the odds for a pause were at 76%.
U.S. rate futures, however, still expected two cuts of 25 basis points (bps) each in 2026 after the data, pricing in 59 bps of easing next year.
(Reporting by Gertrude Chavez-Dreyfuss; Editing by Andrew Heavens)
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