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Traders Price In Two Fed Rate Cuts This Year Following US CPI Data
Traders have received a major boost following the latest US CPI data release, which came in lower than expectations. Now, these market participants are betting that there could be two Fed rate cuts, starting from the FOMC meeting in September.
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Traders Bet On Two Fed Rate Cuts In 2025
CME FedWatch data shows that traders are betting on two Fed rate cuts this year following the US CPI data release. These traders expect the Federal Reserve to cut interest rates starting at the September FOMC meeting. There is currently a 57% chance that the FOMC will cut rates by a quarter point in September, lowering the benchmark interest rate to between 4% and 4.25%.

Furthermore, these traders expect the Fed to keep interest rates unchanged at the October meeting and proceed with another interest rate cut at the December FOMC meeting. There is a 44% chance that the rates will remain at 4% to 4.25% after the October FOMC meeting. Meanwhile, there is a 40.8% chance that these rates will come down by another quarter point to between 3.75% and 4% after the December meeting.

This development follows the release of May US CPI data. As CoinGape reported, the May CPI came in at 2.4% year-on-year, lower than expectations. It also rose by 0.1% month-on-month, lower than expectations of 0.2%. The Core CPI also came in lower than expectations.
This is a positive for the crypto market, as it further strengthens the case for Fed rate cuts, since inflation in the US is cooling off. However, traders are expecting the Fed to keep rates unchanged at the June FOMC meeting next week.
CoinGaope reported that there is a 0.1% chance that Powell and the FOMC will cut rates. Meanwhile, there is an 81% chance that interest rates will remain unchanged at the July FOMC meeting.
Amid Powell’s reluctance to cut rates, US President Donald Trump continues to push for a Fed rate cut. Trump recently urged the Fed to cut interest rates by 100 Bps. Vice President JD Vance is also pushing for the Fed to lower rates. Vance stated that the Fed’s refusal to cut rates is “monetary malpractice.”
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