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The
U.S. central bank on Wednesday pushed out the start of rate cuts
to perhaps as late as December, and Fed officials reined in
projections for how aggressively they would cut rates this year,
from three 25 basis point rate cuts to just one.
"The data is going to need to change a lot of minds to bring
people back to cutting in September, and start doing so in the
next two months," UBS economists, led by Jonathan Pingle, said
in a note dated Wednesday.
J.P.Morgan continues expect the first cut in November, but sees
risks tilted 'a little more' toward September than December.
BofA Global Research retained its December forecast for the
start of policy easing.
U.S. consumer prices were unexpectedly unchanged in May amid
cheaper gasoline, data showed on Wednesday, but inflation
remains too high for the Fed to start cutting interest rates
before September.
Market expectations for a rate cut in September have fallen to
61.5%, according to CME's FedWatch Tool, after rising to roughly
70% in the wake of the inflation data. Odds for a December rate
cut are now at 93%.
(Reporting by Roshan Abraham and Reshma Rockie George in
Bengaluru; Editing by Sonia Cheema and Varun H K)
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